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Home My WebLink AboutContract 44339 CrrY SETWARY PT (;ONTRACT Noo STATE OF TEXAS COUNTIES TA T NTON AND WISE THIS AGREEMENT is made and executed by and between the City of Fort Worth, °'I"exa. a municipal corporation situ ted in Tarrant, Denton and Wise Counties, Texas, hereiinattcr called the "City", acting harem by and through Fernando Costa., its duly authorized Assistant City Manager, and Raftelis Financial Consultants Inc., hereinafter called the "Consultant.// acting herein by and through William fir. Stannard, its duly authorized President and CEO. WHEREAS, the City desires to perform a Wholesale Wastewater Cost of Service and Rate Study; and WHEREAS, the City desires to hire a professional firm knowledgeable and experienced in conducting such a study; and WHEREAS, the Consultant has represented that It is knowledgeable and experienced in conducting such,a study. NOW, THEREFORE, that for and in consideration of the mutual covenants and agreements herein contained, the parties hereto do hereby covenant and agree as fellows: SECTION 1. DEFINITIONS In this Contract, the following words and phrases shall be defined as follows: Ci 's Representative tative means the Director of the Water Department or his designee. Contract Documents means the Consultant's Draft Scope of Services and all its addenda, attached as exhibit"A",,this Contract and all other attachments. Deliverable Document means a. report, photograph, electronic file, or an invoice that shows the completion on of one of the word tasks and/or suhta.sks. Electronic files shall he in Word, Excel, AutoCad, or similar software a,re and shall he provided as requested by the City. Notice to Proceed means the letter issued by the City that authorizes Consultant to begin. work. It also authorizes future invoices to he paid. The City hereby contracts with the Consultant, as an independent consultant, and the Consultant hereby agrees to perform the professional services set out herein n accordance with standard utility rate-setting practices and policies. OFFICIAL RECORD CITY SECRETARY RECEIVED 1 FTv WORTHp TX SECTION 2. SCOPE OF SERVICES The Consultant shall perform a Wholesale Wastewater System Cost of Service and Rate Study for fiscal year beginning October 1, 201.3 in accordance with Consultant's Response to the RFP as described in Exhibit A. SEGI ON 3. TIME OF PERFORMANCE Services of the Consultant shall commence upon execution of this Agreement. Unless otherwise directed by the City and agreed to by the Consultant, the deliverables shall include the following as set forth by the City. 1. The Consultant will review all 'inputs made by Staff into the rate model. I if, it 2. The Consultant will review and coniirm an calculations by the model related to establishing revenue requirements: ,a) operating expense-, b) depreciation expense; and c) return on investment., 3. The Consultant Will review and confirm all calculations by the model related to allocating costs of service: a) allocate cost of service to wastewater service ftirictions; and b) allocate ffinctionalized costs to the wholesale customer class 4. The Consultant will review and confirm all calculations, by the model related to calculating and recommending rates and charges: 5. May 16, 2013 Preliminary Cost of Service and Rates Report; 6. June 6, 2013 1.st Draft Cost of Service and Rates,Report; and 7. July 18,,2013 Final Cost of Service and Rates Report. SECTION4. COMPENSATION TO THE CONSULTANT AND METHOD OF PAYMENT As compensation for the services required to complete thi's, Project in accordance with the terms of this Agreement, the City agrees to pay the Consultant on the basis of the hourly rates set forth in thi's section an amount not-to-exceed $44,5610., Thi's amount shall constitute full and complete compensation for the Consultant,' s services, under this Agreement,, including all expenditures, made and expenses incurred by the Consultant in performing such services. Such compensation shall be paid to -the Consultant in monthly installments upon submission of statements, together with supporting data indicating the progress of the work and services performed for the month 'Immediately preceding., Invoices will be due upon receipt and payable within thirty (30) days, subject to certification by the Director of the Water Department, or his authorized representative, that such work has been performed and the expenses have been incurred. Such certification shall not be unreasonably withheld or delayed. Reimbursable expenses are part of the Not-to-Exceed amount and include, but are not necessarily limited to subcontractors expenses, travel, report production and other out-of-pocket expenses, which shall be paid based upon actual cost, supported by such documentation as the City may reasonably request. SECTION 5. PROFESSIONAL RESPONSIBILITY AND WARRANTY Consultant shall perform services consistent with skill and care ordinarily exercised by other professional consultants under similar circumstances at the time services are performed, subject to any limitations established by City as to degree of care, time, or expense to be *incurred or other limitations of this Agreement. Consultant further warrants that it will perfon-n all services under this Agreement in a safe, efficient and lawful mam.-ier using industry accepted practices, and in full compliance with all applicable state and federal laws goverru'rig, its activities and is under no restraint or order,which would prohibit performance of services under this Agreement. SECTION 6. ESTABLISHMENT AND MAINTENANCE OF RECORDS Records shall be maintained by the Consultant at its place of business with respect to all matters covered by this Agreement. Such records shall be maintained for a period of three (3) years after receipt of final payment under this Agreement. SECTION 7. AUDITS AND INSPECTIONS The Consultant agrees that the City shall, until the expiration of three (3�) years, after -the final payment under this Agreement have access to and the night to examine any directly pertinent books, documents, papers and records of the Consultant involving transactions relating to this Agreement. The Consultant agrees, that the City shall have access, during normal working hours to all necessary Consultant facilities, and shall be provided adequate and appropriate work space in order,to conduct audits in compliance with the provisions of this section. The City shall give Consultant reasonable advance notice of intended audits., The Consultant further agrees to include in all its subcontracts hereunder a provisions to the effect that the subcontractor agrees, that the City shall, until the expiration of three (3) years after the final payment and directly pertinent books,, documents, papers and records of such subcontractor, involving, transactions to the subcontract, and further, that City shall have access during normal working hour's to all subcontractor, facilities, and shall be provided adequate and appropriate work space, in order to conduct audits in compliance with the provisions of this article, and shall give subcontractor reasonable advance notice of'Intended audits. SECTION 8. INDEMNIT Y THE CONSULTANT AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS THE CITY AND ITS OFFICIALS, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL THIRD PARTY CLAIMS, ,ACTIONS, SUITS OR PROCEEDINGS INGS OF ANY KIND BROUGHT AGAINST SAID PARTIES TO THE EXTENT CAUSED BY THE NEGLIGENT ACS", ERROR, OR OMISSION OF THE CONSULTANT OR CONSUL 'ANT'S AGENTS, EMPLOYEE OR OFFICER, IN THE PERFORMANCE FORMANCE OF SERVICES HEREUND ER. THE CONSULTANT IS NOT REQUIRED HEREUNDER TO DEFEND, INDEMNIFY AND HOLD HARMLESS THE CITY OF SORT WORTH AN ITS OFFICIALS, AGENTS AND EMPLOYEES FROM LIABILITY RESULTING FROM THE NEGLIGENCE OR WRONGFUL ACTS OF THE CITY OR ANY THIRD PARTY, TY, THE INDEMNITY REQUIRED HEREUNDER S.14ALL NOT BE LIMITED BY REASON OF T HE SPECIFICATION OF' ANY PARTICULAR INSURANCE COVERAGE IN THIS AGREEMENT. SECTION 9. COMPIJANCE WITH LAWS In providing the scope of services outlined herein, the Consultant shall complywith all applicable laws,ordinances,finances, and codes of the Federal, State and local governments. Consultant certifies that on the day work is, to commence under this .Agreement and dung the duration of the agreement, it shall have and maintain current valid and appropriate federal and state licenses and permits necessary for the provision of services tinder this Agreement. Consultant also certifies that if it uses any subcontractor in the performance of this Agreement,ent, that such subcontractor shall have and maintain current valid and appropriate federal and state licenses and permits necessary for the provision of services under this Agreement. SECI1ON 10. During tie performance of this Contract, Consultant agrees not to discriminate against any employee or applicant for employment because of: race, religion, color, sex or national origin, except where religion, sex or national origin a bona fide occupational qualification reasonably necessary to the normal operation of the Consultant. Consultant agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of the n �n-discrimnation clause. Consultant also agrees that in all s licitati' ns, or, advertisements t' r employees placed by or on behalf of this Contract, that Consultant is an equal opportunity employer. Notices, advertisements, and solicitations placed in accordance with federal law, rule or regulation shall he deemed sufficient for the purpose of meeting the requirements of this section. SECTION I L MODIFICATION No moditication of this Agreement shall be binding on Consultant or the City unless set out writing and signed by both parties. Modifications shall be in the same format as, the final specification showing the change or addition of a task, project schedule, deliverable document(s,), and schedule of payments. SECTION 12. PERSONNEL The Consultant represents that it has, or will secure at its own expense, all personnel required in performing all of the services required under this Ag' e Agreement. Such personnel shall not b employees of or have any contractual relationships with the City. All the services, required hereunder will be performed by the Consultant or under its supervision and all personnel engaged in the work shall be qualified and shall be authorized or permitted under state and local law to perform such services. The Consultant represents that the Consultant's Project Manager, Thomas Beckley, is available to ensure completion of the scope of services,pursuant to this Agreement. SECTION 131. ASSIGNABILF'FY Neither party hereto shall assign, sublet or transfer its interest herein without prior written consent of the other party, and any attempted assignment, sublease or transfer of all or any part hereof without such prior wn'tten consent shall be void. SECTION 14. DEFAULT Consultant shall not be deemed to be in default because of any failure to perform under this Agreement, if the failure arises, from causes, beyond the control and without the fault or negligence of Consultant. Such causes shall include acts of God, acts of the public enemy, acts of Government, either its sovereign or contractual capacity, I quarantine restrict ions n e lty,, fires, flood, epidemics,, quarant strikes, freight embargoes,, and unusually severe weather. III Consultant falls to begin work herein provided for within the time specified above, or to complete such work within the time specified above, within the true meaning of this Agreement, City shall have the right to take charge of and complete the work in such a manner as it may deem appropriate. If City exceeds the costs detailed in the attached documents, City may deliver to Consultant a written itemized statement of the total excess costs, and Consultant shall reimburse City for such excess costs without delay. If, at any time during the term of this Contract, the work of Consultant fails to meet the s fficat'ons of the Contract Documents, City may notiry Consultant of the deficiency in writing. peci I Failure of Consultant to correct such deficiency and complete -the work required under this Agreement to the satisfaction of City within ten (1 0) days after written notification shall constitute default, and shall result in tennination of this, Agreement. All costs and attorneys fees incurred by City in the enforcement of any provision of this,Agreement shall be paid l Consultant. 0 1 11 The remedies pro�vi,ciect f i or herein are n addition to any other -remedies available to City elsewhere ire this Agreement and by law. SECTION 15. TERMINATION OF CONVENIENCE OF CITY The City may termin ate d-ds Agreement for its convenience at any ti me by giving at least ten (10) days notice in writing to the Consultant. In the event of terniination pursuant to this paragraph, Consultant shall be entitled to receive payment ,for all work completed or 'in progress, and for costs reasonably incurred to close out its project services. Compensation is to include fees, expenses, and liabilities to subcontractors or other third parties. Consultant will make reasonable attempts to cancel all such liabilities in order to mitigate the cost to the City. If this Agreement is terminated due to the fault of the Consultant", Section 14 shall apply. SECTION 16. INSURANCE Consultant shall maintain at its own expense the followinginsurance., I. Commercial General Liability (CGL) $100,000 each occurrence $2,000,,000 aggregate linut 2. Workers' Compensation Statutory limits, Employer's liability $100,000 each accident/occurrence $100,000 Disease- each employee $500,0010 Disease - policy limit 3. Automobile Liability $1. 000,0100 each accident on a combined single limit basis Split limits are acceptable if limits,are at least.* $,2,50,000 Bodily Injury per person/ $500,000 Bodily Iqjury pier accident $1,00,000 Property Damage 4. Errors& Omissions(Professional Liability) $1001000 per claim and aggregate 4 The certificate of insurance shall document -the City of Fort Worth, its Officers, Employees and Volunteers as an "Additional Insured" on all liability policies. The additional insured requirement does not apply to Workers' Compensation policies The certificate of insurance shall provide thirty days (30) notice of cancellation or non-renewal. Example.- "This 'insurance shall not be caniceled,, limited in scope or coverage, cancel,led or non-renewed, until after thirty (30) days prior written notice has been given to the City of Fort Worth. The certificate shall be signed by a agent authorized to bond coverage on behalf of the insured, be complete in 'Its entirety, and show complete insurance carrier names as listed in the current A.M. Best Property & Casualty Guide All policies shall include a Waiver of Subrogation (Rights of Recovery) in favor of the City of Fort Worth., The insurers for all policies must be licensed and./or approved to do business in the State of Texas. Except for workers' compensation, all insurers must have a minimum rating of A-: VII in -the current A. M. Best Key Rating Guide or have reasonably equivalent financial strength and solvency to the satisfaction of Risk Management. if the rating is below that required, written approval of Risk Management is required. if insurance policies are not written for specified, coverage limits, an Umbrella or Excess Liability insurance for any differences is required. Excess Liability shall follow form of the primary coverage. "Unless otherwise stated, all required insurance shall be written on the "occurrence basis". If coverage is underwritten on a claims-made basis,, the retroactive date shall be coincident with or prior to the date of the contractual agreement and the cert1ficate of insurance shall state that the coverage is claims-made and the retroactive date. The insurance coverage shall be maintained for the duration of the contractual agreement and for five (5) years following completion of the service provided under the contractual agreement or for the warranty period, whichever is longer. An,annual certil'icate of insurance submitted to the City shall evidence such insurance coverage. Policies shall have no exclusions by endorsements, which nuffily the required lines of coverage, nor decrease the limits of said coverages unless such endorsements are approved in writing by the City. In the event a contract has been bid or executed and the exclusions are determined to be unacceptable or the City desires additional insurance coverage, and the City desires the Consultant/engineer to obtain such coverage, the contract price shall be a4j,usted by the cost of the premium for such additional coverage plus 10%. Certificates of Insurance shall be furnished to the City upon the request of the City. WM SECTION 17. SEVERABILITY 0 4 If any portion of this, Contract is held to be void invalid, or otherwise unenforceable, in who e or part,the remaining portions of this Contract shall remain in effect. SECTION" 18. VENUE Should any action, whether, real or asserted, at law or in equity, arise out of the terms of thi's Contract,,venue for said action shall be in J'arrant County, Texas. SECJJON 19. AGREEMENJ`AMENDMENT Thi's Contract and all attachments represents the entire understanding between the City and the 0 Consultant in respect to the PrQJect, supersedes any and all prior written or oral negotiations of agreements between the parties, and may only be modi.neu,in ing signs ct t)y both parties. SECTION 20�. NOTICES All written notices to the respective parties shall be sent by registered mail and be addressed as follows: CITY OF FORT WORTH CONSULTANF Frank Crumb William G. Stannard Water Department Director President& CEO City of Fort Worth Raft ells,Financial Consultants, Inc. 1000 Throckmorton 3013 Main Street Fort Worth, Texas 76102 Kansas City, MO 64 108 SECTION 2 1. CAPTIONS The captions of this Contract are for informational purposes only. and shall not 'in any way affect the substantive terms and conditions of the Contract. SECTION 22. CONFLICTS This Contract is the sole agreement between the City and the Consultant and any and all other prior agreements, whether oral or written. ,, are merged into this Contract and of noffirther force or effect. EXECUTED on this, the"13ef).day of 120134, Raftell's Fm" ancial Consultants, Inc. City of Fort Worth,Texas, 7 C: BY William G. St ark Fernando Costa ITS President and CEO Assistant City Manager Date Date Approval Recommended Wjotness Frank CrumbI, P.E.,, Director For Worth Water Department APPROVED AS TO FORM AND LEGALITY.- Chris,ta Reynolds Senior Assistant City Attorney AT' S T 100 4�4aid Kay r low- City Seca Co triq EN 7"7k(o,�'Zj iJ:IR:E D: Date OFFICIAL RECORD D ly b"01 CITY SECRETARY no WORTH, TX Exhibit Consultant's Response to RFP rr J 1;= y"I r { ^ J u I I M 1, ^ / , I T y, W I I I I P A R T E N T Who sa te 'Wastewater Cost, of Service and Rate Study January 28, 2013 r / I VIII„y, r y I ” u I ✓�mY 11' y�,� � oV I° I E � � I y „ 0 a / / I I a i ,F^. ,�I �., m,,�."�«n✓mm��,M�:��«��'°�^far wN"«r,' //. r �„y « a' 'I � �wY;, « y, .t, r' ,gym r ti I 1 i / lr , I'I I� e mom„ c pp , A Orr I ux hi r µ ,f " w,i,mW w',i �+�">y�W'Nry✓ '��n��t,♦� �?r V,�,.? / /, I�, �J i � Ji� ��,i x 1 y N Ili III N Y u II ICI i II I. I tiry , l� i w :.l^"" .,,»�"""�'•nw' "emu,� .� �"s, e „. ,,a, �,„ �� ,»�,,�w I:.. � rmN wra 7' �'"' ,. �. .w x,r.• ,• � ","� � wM " r."e m 1M or, SIC, r � a � AL v,N a ^ is fill" p .,. low oft 401 Congress Avenue, r +m " w Suite TX 78,701 Phone 512'.48? 3409 Fax 512.4,87. 499 R A T E L I S FINANCIAL CONSULTANTS.IN .r . f a .a r F VIII VIII��I I I �� This page, intentionally left bta,nk to facilitate two-sided printing, .......... ................ ......... wdUr w d 401 Congress Avenue"t %, v Suite 1540 5 12 687,3499 ff Austin,TX 78701 A F T E January 25,2013 !lr: Skipper Shook Senior Utility.date An„d.yst Fort Worth Water Department 1000'rock.m+orton,,Second Floor Fort forth,TX 761 o. Subject.Proposal for Wholesales"'wastewater Cost of Service and Rate Study Dear Mr.Shook Raftelis Financial, Consultants, Inc. (RFC) is pleased to submit this proposal to conduct a wholesale wastewater cost of service and rate (Study) for the City"ty o Fort Worth (City) Water Department epar-t gent .We appreciate the opportunity to submit this proposal, which details our project approach to meet the Department's objectives and our qualifications and experience within the water and wastewater utility industry. 'ffie City h s population nearing 0,f oo,with a rich history dating;back to 11 73 when it was first incorporated* 'Me City purchased the water system in 1884, and began treating wastewater in 19� 4. In addition to providing service to City residents and businesses,the City provides service to areas outside the City through wholesale water and wastewater contracts. e City is seeping a qualified consultant to perform a cost of service and rate study for its wholesale wastewater service. 'pecifically, the City recognizes the vale in regularly reviewing wholes-ale rates, and conducts a wholesale wastewater rate update on a three-year cycle.As part of this study, the City is seeking a consultant to evaluate the existing rnethodolog� and provide recommendations for the updated calculation. Based on our extensive experience and expertise in utility finance and rate setting,we believe that RFC is the most quali- fied firm to assist the City with this important project. I .FC was established in 1993 to provide financial,pricing,and management consulting;services o f the highest dual- ity to public and private water and wastewater utilities. l�FC i.s one of the largest and most experienced utility rate and financial consulting firms in the country. Our staff have provided rate and/or financial planning assistance to more than 500 utilities across the United "Mates and have conducted thousands o f studies. No one in the industry can equal RFC's combination of sire, efficiencies, and corporate independence. Our mission has always been o_ cMused on assisting our clients in meeting their goa,ls of financial viability,and we have no "stake” in the scope and depth of a utility's capital investments,which allows us to avoid the potential for conflicts. Our staff members are revolved in sha ing industry standards by chairing Inc activety participating in various com_ nittees within the Arnerican Water Works Association A A and the Water Environment Federation 'EF . We have authored or co-authored several industry standard books related to water and wastewater utility rate setting" and llnance,and are also responsible for producing the biennial A A/RF'C national lVater and Wiste wvater Rate err ,which is the most con prehcnsive collection of water and wastewater utility data available; in the industry. wa�ooww o... To assist the Department with this project,we have assembled a team with extensive experience and a reputation for quality service. As President and Chief Executive Officer of RFC, I will serve as Pro.lect Director, responsible for overall project accountability and contract-tial representations with the Department. I have more than 35 years of experience providin(Ir consulting services to utilities covering a variety of economic, financial and management matters.Tom Beckley will serve as 'rc Ject Manager for this project.He will manage the day-to-day aspects of the project and ensure it is within budget,on schedule,and effectively meets the Department's o I *ct'ves.Tom has been with RFC since 20 00,,serving as manager on a variety of projects to assist water and wastewater utilities in address- inn economic and financial 'issues. Rocky Craley will work at Tom's direction in conducting analyses and preparing project deliverables. Rocky has provided a variety of financial and rate consulting services for utilities acro�ss the country.In addition to our dedicated Project, 1 earn members,we will have the full support of RFC's staff of 3 8 util- ity rate,financial,and management consultants. We are proud of the resources that we can offer and welcome the opportunity to be of assistance to the City on TN this engagement.Should yore have any questions,ple4se do not hesitate to contact me or our Yrp:lect Manager,To Beckley,using the following contact information. William (Bill) Stannard,PE Tom Beckley Office:816.285. 22 Office: 816.285.9024 Mobile:913.710.2575 Mobile: 816.682.1328 E-Mail:wstannard@raftelis.com E-Mail.-tbeckley@raftets.com Very truly yours, MFTELIS FLIVANCI44L CONS ULTJNTS,LVC. William G.Stannard,PE President and Chief Executive Officer ........... .. .. . . ilk y ■y� ¥ \.\� :.�.© a<if.. » z ��©■®2:�\?� � �«� �2�� » #��:\�� . This page i ntentiona l,eft bilank to facilitate printilng. FT E L15 1w-1114 A N I A L C 0 N S U UrA N T5, 1 CITY of FORT WORTH" PATER DEPARTMENT FIR "Mi In 1 Y�F3 Raftell's Financial Consultants { i "16% r Inc. (RFC) a+s .�ound o 'Iw.1 v"de is r vices that help � r r t r !n utilitioes function as sustainable r organizations wtilie provicing OFFICE the public with CE LOCATIaINS Austin Office � clean affordable price. a 401 Coy ress Avenue Suite 1540 Austin,TX 78701 p:51112.6 87.3140 91 512.687.3 417 With this o,oal in mind, C has grown to become one o the Kansas City Office largest and most respected utility financial, rate, and rnanagen,ent 3013 Ma,in,Street consulting practices in the nation. RFC has experience providing � Kansas City,MO 64108 ° rate/financial services, including cost of service analysis, to faun- p:816.285.902'0/f.816.285-9021 dreds of utilities across the country and abroad, allowing LIS to Charlotte Office provide our clients, with innovative and insightful reeorn.n°enda_ 1031 S.Caldwell',Street,Suite 1 O bons that are founded on industry best practices. Charlotte,NC 282'03 } p;704,373.,1199 f:704.373.1113 � OfPasadenaPasadena roug out our history, e have maintained a strict focus on the Pasadena' 2011 S.Lake Avenue,Suite 301 financial and management aspects of utilities,building a staff with Pasadena,CA 911. 1 � p 2"6,5:83.1,411 o�led and ski Us that are, extremely s eeiah�e to the services p:626.583.1 594 f:6 that we provide,and thus allowing us to provide our clients with Orlando suffice independent and objective advice. RFC's staff currently consists of 976 Lake Baldwin Lane,Suite 204 . . consultants in our 6 offices�' "ces pos�ttoned strategically throughout p:407.2" 11.4775/fw 407330.5941 the country to effectively and efficiently efficien,tly serve our clients. Our full consulting staff will e available to provide support for this project, F�a�tei��I urg 1�21 Edinburgh South Drive,'Suite 21 as, necessary, giving us ample resources to meet the City's goals Cary,NC 217511 and objectives. p,9119.780.91151 N rw�„ � �µM 9 II � �I �'II Irr, ^ �I ,,.�° a 1,� I e � u w r I k n �, 1 A �.°Was 1 Ir Advisor.o pr ow re gist -i,,,t l � r e q u i �,� e� t is a �. f fl IC ..REGISTERED u nde� hI o d ^rrnk ; aH,Street Reto rin and Co ri su r rie r I` 'cc t l on Act.Att firrns, r h t p Ir,,ro .r) d .,�f 9 d. g, r,. u l w a, e r � �pN �.1 r P � r � n I� I I� � �W � I E �"� I� pw M {�I )pP � � �" pI W n. r w.�. i,...��.��;� � � �,��.� '.N'I ,�'tl�..l@ T�I �r. { :�,.,,�,"! irc �Wi��,��' s. .,(., I,!'� I(�... .:�J,I,W q„.,,� 'R,,� IN ,'.�� .. �.: n U N � w� t h�� r� .� � � ^ r,� � rn M, � �Iy{N� �� I� �.,�� w r �� a^� � ��In � ��° �,� � t �.� � � � �ICIPAL a M �� I^ re r� � ry. � 1.... „ire I,�^ � ^� r�la. Naumm J r � 1.. � .. I � ° I r. N'... mu rir ax ,�.,,i. III n p„m^�. rdu. V„U.i A� ww , .i ,,,i' 4..iIM �' 1 r��r. ( ry, i �.orr1V• ;..r,�, r ..v;W�.µ 4 r,ii�:ry' "oar i� ,r I� i. ( ., illy I. 'Po,.� ., urn! 4 'r 'h, l: /(.. �. I� "N 4 „�I� 'I �� t�� m��^� ,�� i� ,,� ��,��.. r�� „�� ,� Irr. ,..I � ��r.r Ir�� ..� ��. �� t� � � �r ru F I ro� I� I �, r~r��t: I� In w,�r � � .°�I�u�rt� � �� of ,L.°��rt . � W � NM �w ,�� , �� u.�� rmr �t�� ,� iA '� �� ,�°r � � ��t� t (R�,',°b t iSSLiaiices i� �a� ��°�� u� :� ��G ��^� ��,, � ,; �� ^ w��µ�� r ��u�Iw .. ofthe SEC and the �ti N R n fr. a 02 CITY OF'F'ORT WORTH WATER DEPARTMENT "AFTELiS FINANCIAL NS A141"5,INC. UNPARALLELED EXPERIENCE FOCUS RFC staff'have assisted more than 500 water and/or RK's services are solely focused on providing finan-, wastewater utilities throughout the country with a vial, pricing, and management consulting services to Nvide variety of financial and rate consulting services, water-industry utilities., Benefit:Our extensive national and local experience will Benefit:This focus -allows RFC professionals to de- allow us to provide innovative and insightful velop, and maintain knowledge and skills 00,000 which are extremely specialized to the recommendations to the Department services that we provide, and will to resolve,challenges,and to provide W/Ow"0010 4 ji'ZIO/ independent validation for the allow us to provide the Depart - proposed methodology ensur- i'll ment with independent and ing that the best industry objective advice. practices are incorporated. W H AO'�T M A K E R F MODELING, EXPERTISE DEPTH OF RFC has developed some of the most sophisticated RE SOURCE S 9- l/ RF leas as one of the lar, yet user-friendly financia e' rate and cost of service rnod- st water industry financial cis available. Our models are planning, cost of service, and rate, consulting practices in the custom-built on a client-by-c nation. ent basis and are non-proprietary, Benefit:Our depth of resources will al- which ensures that our models fit the specific needs and objectives of each of low LIS to sufficiently staff this prefect with our clients, the quatified personnel necessary to efficiently and ex- peditiously meet the objectives of the Department. Ben�fit: Our models are tools that allow us to examine different policy options and cost allocations and their financial/customer impacts in real time. Our models INDUSTRY LEADERSHIP are non-proprietary and are developed with the spec- Our senior staff is involved in shaping industry stand- tation that they will be used by the client as financial ards by chairing various committees within American planning tools long after the project,is complete. Water Works Association (A ) and Water En- Vironment Federation (WEF). RFC's staff members have authored and co-authored many industry stand- CLIENT COMMITMENT and books regarding utility rate setting. RFC strives to develop strong relationships with each I involved in the industr of our clients. We work collaboratively with our clients Ben�fit: Being so act vely * y during the engagement and provide any necessary as- Nvill mow us to keep the Department informed of . emerging trends and issues, and to be confident that s"tance after the engagement. our recommendations are insightful and founded on Benefit: We recognize that we have a, vested interest sound industry principles. in the success of our clients. This engagement Would allow us build a strong and lasting relationship with Department staff. T 15 F I N A N G I��A L C 0 N S U UA N T 3, i'N C. CITY OF FORT WORTH WATER DEPARTMENT 03 'PROJECT TEAM Our team consists of some of the most knowledgeable and skilled financial and management consulting, protession al.s in the wa- t , wastewater, and stormwater utility industry. .-ks a result of their many years of'e erience, our consultants are able to, provide clients with insight- EM ful recommendations to address their goals and objectives. RK places a high priority on being re- _pons ive to our clients, and, therefore, actively manages each consultants project schedule to ensure app,rop'riate availability fbr addressing client needs. fx RFC currently has a team of 38 consultants who specialize in financlial,rate,and/ it or management consulting services for water, wastewater, and stormwater utili- ties. In addition, many of our consultants are Subject matter experts in specific areas of utility finance and management,from innovative pricing structures to organizational optimization.Our per- sonnel are all to leverage the depth of their expertise to provide our enents with solutions to the most complex situations. In addition to our dedicated Pro' ' an the Departrnent will have the support of RFC's full staff for ject 1,ea , p this project.RFC will not be utilizing any s,ubco�nsultants for this project. In the following pages, we have provided brief profiles of each of our Project Tearn. members and descriptions of their role for the Department's proJect.In Appendix A of this proposal,we have included more detailed resumes. While there are no specific registrations/licenses required to conduct the requested services in the State of Texas,all of our Project Tearn,members are fully capable and qualified to conduct these services. c1l'i 'E"N3"e S��,i� n 1, "1,�,",p e i ci d U I 1-y .......... thrnil�.�gll P3rt,,dP,,,voon- d'J', d"r s h,i p i,rli i��"i d ii LEA04111,G"' I I JS"', i tri c 1,u d s a 1"" f-cl,f t a N'14 a n a c,:j e m ri�t i v i 5,),i o(�i c),f A',N`I�A,/A,rr e rric,b e 1-s rl r,1 3 �y'"'t 50C I.0 r"', u r, t aft cA V',d�"S r,),,a t e s r�d C011"i r ie�!,,; t4,ire r,,E".,N cent(",,,air of"r''A'"N AcCOLMtifl�] i,,d Mar�zigerin,ent Cc,,rc�trol s C o rvt t t e:'. t h�fo, f:",r i"n e r h',i r�cj f A WW Xtvi S,t t e, i c�,4 a ria g e m le L ",n m it+e e, ri,,I�, , h 0 es J Chair of fll�ie WEf:"r,�,)sk Fo�ccut or� C ar Af a 3"1 -ofiles to lear-ri niore,,,,,,)bout otir firi,TV's leaders. 14A ro Al AF C 04 CITY OF FORT WORTH WATER DEPARTMENT FINAANCIAL 0014SULT ANTS, i�A v J,10 WILLIAMSTANNARD, PE Project Director (President and CEO, Kansas, City Office) PROJECT ROLE E WRO"TE Mr. Stannard ill be responsible for overall project accountability ensuring fliE BOOK, it is completed in a timely manner,and for contractual representations with the Department. "FC�-Jaff have kioritten one of PROFILE the[eadirig books, Mr. Stannard has more than 35 years of experience providing consulting rin water and iai services to investor and municipally-owned utilities covering management oiastelwater tii")anc , issues,Water.and operation, economic, and financial matters. His extensive experience en- i ance tance n_ compasses formulation of financid systems and ordinances for compli with, regulations regarding the Clean Water Act and the Safe Drinking ,L)q1greh,ionsive ii n d c o Water Act; comprehensive revenue requirements and cost of service stud authored od er ies; consulting engineers and financial feasibility reports related to the sale �ndustry standiard of revenue bonds; financial feasibility analyses; organizational and manage- such as: booksF A, 's w ment revies-,and utility competitiveness studies.He has served as an expert pt WWA M2_11_ lilih,?s I federal and state courts and before arbi- P witness in rate litigation matters in f of Water 7" tration panels and state public service commissions. Mr. Stannard has also an id —- s, served as an arbitrator in resolving water and wastewater rate disputes. Mr. AVAIVA's YtL Stannard has been an active member of the WEE and AVVWA. He served 'onmie as chair of the WEF task force charged with the development of a Manual d Eii"hlioi'i, Wastewater Sy of Practice,Fin-ancinz and Charges for Wa,,� _stems. Mr. Stannard 'EF"s Firlt2L 11 11 -1 was also a contributing author for the book Water and Wastewater Finance n d("O'li a r s f o r ,!1V;i,,A1r!Water sy�4, and Pricinu: A err pretie ns* ILe., Guide Effilrd E ii-tionj. Tiis, authoritative 11"iFIC aiso coricii,,jc,ts text is used by utility managers and consultants throughout the United d f)U b L i s h e s tfi e States. He is a past-chalir of AWWA!s Finance, Accounting and Manage- t, ment Controls Committee, and a trustee of AWWA's Management and i n c a nj u ri ct,to n Leadership Division. t,h A A.T hi s i r,,v ey is y e rn,o st L p-e h e ive iastell4vater aivaRabl,iii in the indiulicit'.'ry, i:i r a ri"i,o re C-c v I i i st, rn 1,)r e h e In s o,f our ptiblications. ,1:TF.L1S FINANCIAL CONSULTAN'rS, 014C. CITY OF FORT WORTH WATER DEPARTMENT 05 rOM BECKLEY ?roJect iM' anaqer 15�enior Consuitant, RFC - Kansas City' Office] PROJECT ROLE ,Mr., Beckley will be managing the day-to-day aspects of the project and ensuring it is within budget,on schedule, b and of meets the Department's objectives, He will also conduct analyses and prepare project deliverables. PROFILE Mr. Beckley has over ten years of experience with RFC in conducting finance related projects. He has ass,isted a N 'de range ofmunicipal water and wastewater utilities in conducting cost of service, lal f vi financk easibility privatiza ti n, system development fee, and other finance related studies�. Some of his past clients include: San Francisco Public Utilities Commission (CA); City of Phoenix (AZ);,City of Peoria(AZ);City of Naperville (IL); Northwest Water Commission (IL);City of Flobbs (NM); Birmingham Water Works Board (AL);City of Orlando (FL);Ar- lington County (VA); Loudoun County Sanitation Authority (VA); City of Suffolk (VA); City ofSaginaw (MI), City of Wyoming(M.1); Ciry of Grosse Pointe (MI);,City of Denton (TX);and City of Olathe (KS). 4,13 1k ""I"OCKY CRALEY 'taf o r Consuitant, RFC - Austi n� Office) PROJECT ROLE Mr.Craley will work at the direction of Mr.Beckley to conduct analyses and prepare project deliverables. PROFILE N11r. Craley_*rained RFC at the beginning of 2008. He has a highly analytical background, and his expertise fies in i i I I data compilation, analysis, and modeling. Since joining I�FC, he has served as a consu,ltant on numerous water and wastewater rate and cost of service studies. Additionally, he has had the opportunity to work on a wide range of other Pr( 1 1 )iects involving public-private partnerships, rate differentials, risk analysis, and utility policy. INIr. Cra- ley also manages, UC's, many survey eff*orts, including the biennial national Water and �Lqstewater Rate Suryu . I T co-produced with ikWWA and the Utility Financial Information Survey produced by AI'VIWA. Mr. Craley is an active member of WEB`, e nd WEF's, Utility Management Committee, and he serves on the WEFTE,C Planning Committee. He is also a contributing author,for the 4th edition of Water and Wastewater Finance and.-Pricing: A Comprehmiive GLfidc to be released in 2013. lip, t CITY OF FORT WORTH WATER DEPARTMENT F TEL i S F�!,4 A N CI A L C 0[' 'S kJ I-T�k N Ts, i N C. This page irate n-tionaLLy Left" Ma to facii hate two-sided printing. ,il,AFTELIS FINANCIAL C"0NSLi1L.1'ANfS, INC� CITY OF FORT WORTH WATER DEPARTMENT 07 L I EAPERIEN & REFEREriCES RFC staff have provided financial, rate, andi/or management consulting serviiceis to more than 500 utilities across the country. In the past year alone, RFC worked on more than,250 financial,and/or rate consulting projects for over 160 water,wastewater, and/or stormwater utilities in 28 states and the District of Columbia. The matrix below displays a list of some of the utilities that we have assisted in th,e past and the services per,formed,for these utilities., Ic Birmingham(AL)Water Works Board Ile 4e, City of Billings,MT Mobile(,ALJ Area Water and Sewer City of Raleigh,NC System City of Win ston-Satem/Forsyth County loe Little Rock Wastewater Utility,AR vlN Ve loe le Utilities,NC City of Peoria.AZ City of Durham,NC City of Phoenix,AZ Town of Cary,NC vi -e 'r Pima County,AZ City of Concord,NC City of Scottsdale,AZ City of Henderson,NV City of Anaheim,CA City at Hobbs,NM City of 8 everty Hilts,CA City of Buffalo.NY City of San Diego,CA New York City Water Board/Municipal City of Redlands,CA Finance Authority,NY Metropolitan Water District of Southern Northeast Ohio Regional Sewer District, California OH San Francisco(CA)Public Utilities City of Dayton and Montgomery County,OH Commission City of Portland,OR V Groton Utilities,CT Allegheny County Sanitary Authority,PA District of Columbia Water and Sewer Borough,of Carlisle,PA Authority City of ilmington,DE City of Fri ,PA W City of Pompano Beach,FL City of Newport,RI City of Canton,GA Pirovidience Water,R) Columbus IGA)Water Works Mount Pleasant Waterworks.,SC Gaiiinesivitte/HaiLl County,GA, Spartanburg Water,SC City of Kansas Ciity,KS Hallsidate-Powett,Utility District,TN City,of Olathe,KS Metro Water Services,Nashvitle,TN City of Wichita,KS Sewanet Utility,District,TN Paducaih-McCracken Joint Sewer City of Johnson City,'rN AgencylKY) City of Denton,TX Sewerage and Water Board of New I/ Tarrant Regional,Waiter District,TX Orleans,LA San Antonio ITXI Water System City of Baltimore,MO, Arlington Macomb County,M1 ngton County, A V M 10, Loudoun County Sanitation Authority IVAI ✓ City of Saginaw,MI City of Wyoming,MI City of Suffolk,VA C Smit,MO City at Bu,rtin,gton,VT City at Lee's um Tacoma Water Department,WA Kansas City,MO Metropolitan Sewer Distirct St,Louis.MO United States Navy, 08 CITY OF FORT W'ORT'H WATER DEPARTMENT �' L I S F I N,fir 4 C I A L C"0 N 5 U Ll', N r 5, '1'N C In the following,pages,we have provided detailed descriptions of five past cost of service and rates stud�ies using the utility basis that RFC has worked on that are similar in scope and/or geography to the Deplartmient's project.We also selected these projects because many of our proposed Project Team members worked in similar roles on them. We have included refer- ences for each of these clients and urge you to contact them to better understand our capabilities and the quality of service that we provide. In Appendix B of this proposal,we have also included recommendation letters from some of,our clients as further evidence of RFVs focus on client satisfaction., ,ow DAN ANTONIO RFC has completed two comprehensive cost of service and rate studies for the an ATER SYSTEM A_ntonic Water System (SAWS) in the past six years.SAWS is responsible for provid- [TX) ing water and wastewater,services to approximately 300,000 custorners within the City Services Provided of San Antonio and portions of the surrounding metropolitan area. Water supply is > Cost of service study provided by water pumped from the Edwards Aquifer, which provides potable water > Wholesale cost of for approximately 1.2 million people.SAWS is focused on developinga comprehensive meeting lipproach to ng its long term water demands in one of the fastest growing regions I I service study of the country. A combination of of conservation programs,acquisition of addi- > Rate study > Rate model tic water rights in the Edwards,Aquifer and development of new water supplies are > Conservation rates the foundation of the SAWS capital improvement plan. As such,development of'fair and equitable water and wastewater rates, that meet the financial and pricing objectives Client Reference of SAWS and effective communication of the basis for those objectives and the rates to Dan Crowley,Director- community leaders and customers was an integral part of this effort. Financial Planning PO Box 2449 Both studies involved a Rates Advisory Committee (RAC) comprised of San Antonio San Antonio,TX 78298 residents that represented each of the customer types that SAWS serves.One of the in- P-21 0.233. 11 itial tasks an each study for SAWS was a rate setting workshop that RFC facilitated for E.-dan.crowley(asaws.org SAWS staff and members of the RAC.M purpose of the workshop was to bring eve- ryone involved in the process up to speed with respect to some of the technical aspects of rate-setting. The next critical step in the process was the identification and prioriti- zation of pricing objectives. To facilitate this process,SAWS staff and RAC members were provided with a list of pricing objectives that many of RFC's clients identify as being critical. RFC conducted a meeting with SAWS staff and the C. in which the pricing objectives were discussed in detail and then asked the staff and the RAC to rank these objectives, in order of priority* Based on this prioritization of objectives, R,FC was able to focus its effort with respect to identifying potential improvements to the existing rate structures and develop several options for alternative rate structures. RFC then developed a financl,.d tool that provided a high-level indication of the im- pacts that each of the rate structure options would have on various customers'monthly utility bills. 'Me RLAC and SAWS staff used this information to identify preferred wa- ter and wastewater rate structi-ires. Finally, RX4C developed a cost-of-service and rate model to calculate rates under the preferred rate structure options. these calculations served as draft rates that were adjusted to reflect various rate-setting policies,. .........now F T!HUS FINANCIAL C.'ONSULEANTS, CITY OF FORT WORTH WATER DEPARTMENT 09 T Y 0 F '11-ie Cit f Denton engaged RFC to pert*orm a comprehensive water and wastewater )EN'TON IT M cost of service and rate study. RFC conducted a pricing objectives workshop with Services,Provided City staff to identify the pity's pricing objectives. Wiese pricing objectives were used > Rate study to develop proposed conceptual designs, specifically for the water utility, that would > Rate model better meet the objectives of the City. > Financial policies, RFC,worked with the City to review its existing w w water and waste water financial plans Client Reference and ensure they net the needs of the City and provided the capital financing and Nancy Towle,Budget and reserve levels necessary. The City's, financial plan was incorporated, into a new cost mates Manager-Water of service and rate model designed and developed specifically for the City's needs. Utilities Denton also provides wholesale water and wastewater service under contract,and the 215 E. McKinney Street City's existing wholesale rate methodologies were incorporated into the new cost of Denton,TX 76201 service and rate model developed for the City P:940.349.7183 E:,nan,cy.towLe(a - RRC reviewed the results of the cost of service and rate study with City Staff and cityofdenton.com prepared draft and final reports documenting the study process and results. 7he find- ings of the study were presented to the City's Utility Commission by RFC. RFC also provided City Staff with training on the update and use of the model developed. of ITTLE, ROCK RFC was retained by the City of Little Rocks,Wastewater Utility(LRW) to perform MASTEWATER a comprehensive cost of service analysis and system valuation study. LRW is imple- I L I In Y (A R) menting a significant capital improvement program, in compliance with a consent Services Provided order with the State of Arkansas and the EPA to eliminate sanitary sewer overflows. > Cost of service ana:tysis 'Me requirements of this consent order are placing substantial pressure on LRW's > System valuation study costs and wastewater rates and fees. Tie major components of the project included-, > Miscellaneous fee study > Development of a ten-year comprehensive financial plan including LRW's op- Ctient Reference eratioln, maintenance and administration, as well as financing of its ixiajor capital Reggie Corbitt,Chief irnprovement program. Executive Officer > Determination of LRW's cost of providing wastewater, service to its various cus,- 11 Clearwater Drive toner classes, Little Rock,AR,72204 > Development of' waste water user rates to fairly and equitably recover the cost of P:501.688,1404 providing wastewater collection, treatment, and disposal service from the various E.-reggie.corbittfalrwu.com customer classes. > Review and update of miscellaneous fees. 1 > Analysis of alternative system growth charges to be assessed new customers. > Determination of the current value of LRW"s collection and treatment assets. In addition to these project components, RFC also assisted TRW with the creation and implementation of a Rate Advisory Committee (RAC). 'Me RAC consisted of members of the community representing a cross section of stakeholders including neighborhood groups, home builders, businesses, and the League of Women Vot- ers. Tie PLAC held monthly meetings from Nlarch through August, as well as several interim workshops to develop a strong understanding of LRWs operations and to e input to the project team on pricing ob provide jectives,alternative rate structures,and 1,RW's long term financial plan. L'o 10 CITY OF FORT WORTH WATER DEPARTMENT F T E.L I S FF i N A N C I AL "(34, S U L"r A%N r S, 11101TY 40F In 2011,RFC completed:financial planning,cost of service,,and rate design studies for I C H I IITA K S) the City of Wichita f s (City) water and, sewer utilities.'Me City,,which faces long-term ices Provided water supply constraints,was an early adopter of an aggressive conservation water rate Sery > WhoLesa,te rate stud�y structure and is in the process of completing an ambitious aquifer, storage and recov- > Water rate study ery program that will eventually result in up to 100 XlGD of recharge in the aquifer > ernand anatysis that services as its primary source of supply. D Client Reference Tie City's water utility serves approximately 143,000 custorners, and has annual rate Ben Nelson,Senior Budget revenues, of more than S66 million. Key issues facing the water utility were ensur- Anatys,t ing adequate revenues to fund a 10-year capital improvement program in excess of P:316.268.4148 S400 million and reducing the rate revenue volatility associated with an aggressive E:bneLsonfa�wi hita.gov conservation-oriented water rate structure. RFC's 10-year water utifity financial plan feat-Lired the use of updated demand forecasting assumptions to project water sales revenues; detailed debt service coverage ratio projections under a variety of revenue and expense scenarios; and the development of both cash and utility basis test year revenue requirement forecasts. RFC's water cost of service study included the development of a revenue require- ment and associated unit cost of service for each of the City"s twenty-three water rate classes including 'inside city retail, outside city retail, wholesale treated water customers, and a wholesale raw water customer class.To mitigate rate revenue vola- tility, RFC's water rate design featured the use of a readiness-to-serve adjustment that shifted revenue recovery frorri the volumetric to fixed charge component of rates. In addition, the volumetric rate design shifted a higher proportion of revenue re- covery to the lower consumption blocks which are associated with non-discretionary customer water consumption. Tie City"s sewer utility serves approximately 140,000 customers and has annual rate revenues of more than $40 million. Tic primary issue facing the sewer utility was ensuring adequate funding for a 10-year capital improvement program in excess of S,300 million including exceptionally large forecast expenditures to comply with expected nutrient removal regulations in the second half of the planning horizon. RFC's 10-year sewer utility financial plan also featured the use of updated dernarid forecasting assumptions, detailed debt service projections, and the development of both cash and utility basis test year revenue requirement forecasts. Ue sewer cost of service and rate design studies featured the development of volumetric rates and fixed charges for inside city retail, outside city retail, and wholesale sewer custorner classes. In addition, RFC also developed extra, strength surcharge rates for both in- sidle and outside city customers. As part of our consulting engagement, the City requested that RFC analyze, the key drivers of billed water consumption. To accomplish this objective, RFC, analyzed the correlation between historical billed water consumption and driver variables such as temperature, precipitation, price, population, and regional economic activity. As part of this process, RFC developed regression equations that, for customer classes, ex- plained as much as 7'0%of annual billed water dernand (i.e., resulted in coefficients of determination as nigh as .70). )Ai'TELIS RNANCIAL C,*0 14 5 U LTA N T S, �INJ C. CITY OF FORT WORTH WATER DEPARTMENT [T Y 110 F %N I C H i rA, CON,"ri NUED) In addition to water and sewer utility financial planning, cost of service, and rate design studies, RFC also devel- oped a pro forma financial rnodel for the City that,,,Illows, them to compare budgeted to actual water and sewer rate revenues on a monthly basis for each of its many water and sewer customer rate classes. "fhis model,, which riot only includes a monthly forecast of rate revenues by customer class but also by each consumption block within a customer class, is designed to serve as an early warn ing systern that can be used by the City to identify deviations from budgeted rate revenues as earl as possible within a given rate year. Further, it allows the City to determine y both the annual cash flow and debt service coverage ratio impact of deviations frorn budgeted rate revenues should they continue,throughout the year. IT Y 0 F RFC began a multi-,year engagement with the City of'Suffolk(City) to provide fina,n- `*UFFOLK, [VAJ cial,services to the City's Department of Public Utilities (DPU) in 2003. Services Provided RFC's engagement with DU addresses financial, accounting, and pricing issues > Cost of service study confronting the City that impact its water and wastewater systems. fhe City pro- > Misce[Laneous,fee vides retail water arid wastewater service to approximately 21,000 accounts, as well analysis as wholesale water to the Western Tidewater Water Authority (thee Authority) in a > Financial planning re inn that has experienced unprecedented growth in the past ten years. Client Reference Craig Ziesemer,Assistant 'Me scope of services provided to the City includes an annual update of the ten-year Director-Department of comprehensive financial plan, determination of water and sewer costs of service, de- Public Utilities velopment of proposed water and sewer rates for the upcoming fiscal year, and an P:757.923.3684 assessment of the City's water and sewer system availability fees,. In addition, RFC E:cziesemer(acity.suffoLk. also conclucts, an annual true up analysis for wholesale water service to the Authority. v,a.us l true up analysis recalculates the water rates using actual cost and water usage data to determine the actual cost of service to the Authority during the prior year. 12 CITY OF FORT WORTH WATER DEPARTMENT i,,-lMAt4ClAL C-ANSULTANTS, lt,4c. This page i Left bLank to facilitate two-sided printing. „,,VF7!,'-'L1S FINANCIAL CON ISWLT S, H'41C. CITY O�F FORT WORTH WATER DEPARTMENT 13 PROJECT UNDEIIRSTANDIN, G 11-ie Citv of Fort Worth (City), through its Water � I Department(Department),owns,manages and op- crates a water supply, treatment, transmission and, distribution system, and a wastewater coHection, treatment and disposal system serving residents and businesses within and outside the City. Ser- vice to areas outside the City is provided through �,� �,�%;f� r 28 wholesale water agreements and 2,3 wholesale '-Fhe Water Department 1411/1”,1 wastewater agreement s. uses four separate computer models to assist in the (J � i�d ��1 % �1��')��//lift or1'�I�, ",i" V�� 'lY'�� ,,,�� tg cost of service and rate setting process. Wholesale, water and wastewater rates are determined in ac- "Al J, cordance with specific revenue requirements and cost allocation methodologies contained in the wholesale water and wastewater contracts. 'Me Citys practice has been to retain the services of an expert financial and rate consultant to update the wholesale rates on a three-year cycle. '1he cur- rent Request for Proposals (RFC') has, been issued to perform a Wholesale 'Wastewater Cost of Ser- vice :�tudy in accordance with the provisions of the r i 1 Uniform Wastewater Contract using a utility basis me,thodollogy. In order to facilitate the review of our proposal by the Proposal Evaluation Committee, we have orga,ni,zed our proposal based on the sections set forth in the City's RFP. 14 CITY OF FORT WORTH WATER DEPARTMENT ,,AF1'EEL1S FINANCIAL(,,QNSULTANT5, INC. uvr PROJECT APPKOACH 7ASK 1-,-, PROJECT INI'TIATION AND process. Ihis process ensures that all work performed `, by the Pro,* ject learn on this project will be accurate and The goal of this tas,k is to, tay the groun wk or of the highest quality. d U ,i, a successf I project and prov 11de the ongo- !rig 'Management that ensures eft"iciency and Tie QAJ'QC process begins at, the outset of the, project 1ua throughou -ie press. when the Project Manager assigns a member of the 1iity t 6 process. Prow ject Team as the project QAJQ reviewer. 'This pier- SUBTASK A: PROJECT KICK-OFF MEETING son is present at all internal project meetings and works We believe that successful projects begin with a pro- closely with both the Project Manager and the lead ductive kick-off meeting. 'ffie objectives for this consultant during the course of the project. The QA/ meeting include: QC reviewers primary responsibility is to review the work effort for consistency, accuracy, and validity and > Providing a forurn, to finalize the work plan and ensure that the cost of service and rate model that will schedule with City Staf be developed for the project is functioning property and > Discussing the City's modeling and pricing objectives; is based on sound rate-making principles and, standard > Ensuring that the Project Team has a full under- industry practice and that the report produced is coma-, standing of the overall goals of the project prehensive, consistent with the results, and meets the > Providing an opportunity ty for City Staff to meet and high quality standards of RFC. This will be especially become comfortable with our project earn critical given the complexity called for in this model. > Reviewing the data needs for the project 'Me QA/QC responsibility is accomplished through pe- riodic reviews of the model throughout the course of its Accomplishing these objectives will help to ensure that development. For this Stildy,these reviews would occur the project progresses as smoothly as possible. during the following stages of model development: Prior to the kick-off meeting, we will prepare a de- > Once the basic model framework is complete tailed data request fist that will identify the information > Upon completion of the revenue requirements and needed to complete the various analyses. Informa- financial planning module Lion that is typically required to perform a water rate > Upon completion of the cost allocation schedules study includes, for example, recent Comprehensive > Upon completion of the wholesale rate calculation Annual Financial Reports (CAFR); wholesale con- module tracts; recent and current utility budgets; a description > Upon completion of the retail rate calculation module of the wastewater service area; current and historical > Prior to the delivery of the final model results. wastewater treatment and billing data and a long-term capital improvement plan. Some of this information We have found, that a well defined QA/QC process en- will be readily available,whereas other components, may sures that all of our work products will be of the highest require more detailed analyses of operational data, cus- quality and meet or exceed the standards that our cli- tomer bilhng information,and costs, exits have come to expect from the Project T earn. SUBTASK B,-, INITIATION OF'THiE QUALITY SUBTASK Cu ONGOING PROJECT MANAGEMENT ASS URANCE/OUAL,ITY CONTROL F'' ESS the proposed project entails several different, yet During this phase of the project, the Project Team will interrelated, work efforts that will require effective inifiate its quality assurance/quality control (%VQC) coordination betAveen City staff, wholesale representa- ............ 11 ZAFTEL.15 FINANCIAL CONSUL T04TS, re CITY OAF FORT WORTH WATER DEPARTMENT 15 tives and the Pro j,' 7" ect learn. Uur management approach Our Project "Feam commits to stridently follow the stresses communication, teamwork, objectivity, and uniform wholesale contract and precedent established accountability for meeting project ob* i in- over the years. We also commit to strong communica- jectives and i cludes general administrative duties, including client tion with Water Department staff and the Wholesale correspondence, billing, project documentation, and Advisory Committee. administration of the study control plan. is task provides for consistent and competent project man- Defensible Methodology agement to ensure that all deadlines and objectives are 'ffie Project Tearn proposes to conduct the wholesale met in a timely and efficient manner. We believe in a wastewater, rate study using the Water Environment no-surprises approach so that the client is aware of the Federation WE policies regarding financing and status of the project at all times. Our approach includes rates. 'lhie basic premise of' the approach is that rates the fotlowing.- and charges should reflect the costs of providing ser- vice and the revenue produced will be adequate to > A strong Project Manager who will be responsible meet 'revenue requirements, In addition, we will work for facilitating a close working relationship be- with the Wholesale Advisory Committee and Water tween the City and the Project Team and who is Department staff to ensure the proposed rates will be accountable to the City for mecting the technical understood by the customer. requirements of the project, schedule and budget., He will lead meetings throughout the course of the Scope of Services Project and provide meeting notes summarizing the Our proposed scope of services includes the standard issues discussed. rate study elements of revenue requirements determi- > Ample resources to ensure timely completion. nation, cost of service allocations, and rate design, "The > Client involvement and control by proposed scope ensures that the wholesale wastewater Regular and open communication between the rate study will be performed in accordance with gener- Project Team members and City statt including idly accepted principles: for wastewater rate studies,that monthly status reports showing the tasks accom- the methodology utilized will comply with the terms of plished and identification of potent"° problems the uniform contract between the City and its whole- ,it d solutions. sale customers, and precedent established throughout • Assurance of budget and schedule control the years. through the Pro.ject Manager's use of RFC's pro- Ject accounting and management system. S,UBTASK A: ESTABLISH REVENUE REQUIREMENTS Coordination of project activities among the (COST OF SERVICE) Project Team and City staff to meet project cab- 'Me revenue requirements, to be shared by the City's jectives and deadlines.Review of all study-related wholesale customers for the "test year," wi.0 be c�stab- work,and overall quality assurance. lisped utilizing the rate methodology contained in the uniforin wholesale contract between the City and Wholesale customers. Revenue requirements will be determined on a utility basis and will include operating and mmntenance(O&N-1) expense,depreciation expense, S K I 1 1-0 W H�O L E 5�A L E WA S T EWATE R return on investment (i i(.including recognition of i,nvento- A"IrE STUDY ries ,,arid working capital),and street rental fees. Specific I of this task is to 1,.)rw,,,iide1 updated activities to be accon-iplished in this task include- ,,Vhotesate viaste,wC'i,1'te_,r rciltes tlie riew �-c-)n,so'lid,a,ted,riate,i�,i�iloidel,(.ie,ieloped in"I"ask, 11. 1. Operation & Maintenance Expense. Tcst year O&N4 expense to be shared will include audited his- 'ffie study objective is to perforin a detailed whole- torical costs, for the fiscal year ending September 30, sale wastewater rate study to satisfy the requirements 2012, adjusted for known and measurable changes to of the City's uniform wholesale wastewater contract. expense categories, such as salary and wages,, employee ........................... - 11 16 CITY OF FORT WORTH WATER DEPARTMENT FINANCIAL COWSUU'ANTS, lt4C. benefits,power and chemical costs,, non-recurring costs recovered over a related benefit period, and new budget > Volume and Capacity categories if applicable). > BAD > TSS 2. Depreciation Expense. Annual depreciation expense > Customer Billing to be shared will be based on available plant investment > Customer Metering data, as of February 28, 2013, net of grants and con- > Retail Only tributions, applied to appropriate annual depreciation rates as utilized in the most recent wholesale wastewa- Once the components of total wastewater system costs ter cost of service study. have been functionalized and classified, the final step involves allocating the proportionate share of the result - 3. Return on Investment and Street Rental Fee. Re- ing classified costs to the wholesale customers, based on turn on investment to be shared will be calculated on their proportional share of units of service associated investment, in facilities providing wastewater service to with each functional cost category. 'ffie wastewater sys- the wholesale customers or rate base). Investment will tern units of service utilized for the allocation process include plant investment net of accumulated deprecia- will be historical units of service for the fiscal year end- Lion, grants and contributions, plus construction work ing September 30,2012. in progress at February 28, 2013. Investment also in- cludes recognition of Fort Worth Water Department SUBTASK C: CALCULATE AND RECOMMEND RATES inventories and working capital. Return will be deter- AND CHARGES mined based on contract provisions,. Tie street rental 'The revenue requirements, and cost allocations devel- fee to be shared will be calculated as 4 percent of the oped in the previous subtasks will be input into the SUM of O&M, depreciation, and return on investment City's existing, rate model and schedule to determine attributable to wholesale wastewater service. the City's wholesale rates and charges. Rates and charges to be determined will include,at a minimum*. SUBTASK E.ALLOCATE COST OF SERVICE TO CUSTOMER,CLASSES > Volume Charge - S per 1,000 gallons Tie wholesale customer share of test year cost of ser- > B D Charge - S per pound of SOD vice will be determined through a three-step allocation > T'SS Charge- S per pound of TSS process. the first step involves allocating the elements > Customer Charge- S per month cif cost of service (operation and maintenance expenses (O&M),depreciation,and return on rate base) to waste- SUBTASK D: PRO!VII D�E RECOMMENDATION FOR water service functional categories, Fort Worth Water CHANGES IN COSTIRATE METHODOLOGY wastewater O&M expenses, are tracked by the catego- the City's current cost of service — rate methodology ries of administration, engineering, customer service, will be reviewed for: (1) adherence to the terms and treatment, field operations, and non departmental. conditions of the uniform wholesale wastewater con- Each,expenseand investment item used to develop total tract;(2) correct and consistent application of the utility wastewater, system revenue requirements (cost of ser- basis cost of service concepts and principles; and (3) vice) will be assigned to one or more of the following recognition of special conditions and factors which may wastewater service ffinctions depending on its nature: influence the wholesale rate design causing significant Z1 fluctuations from year to year in calculated rates. Af- > Collection ter discussions with Water Department staff and the > Treatment Subcommittee of the Wholesale Advisory Commit- > Customer Accounting tee, studies may be conducted on flow normalization, > Wholesale Custorner Metering strength billing assignments, and other assumptions > Administrative and Non-Department or applications incorporated in the ratemaking meth- odology if considered necessary. Based on this review Next, these functiona-lized expenses will be classified and any recommendations resulting in changes in the into one or more of the following cost components:, F'T F i.I S F HNI A N C I A L (0'0 N 5�U L 7-A N T 5, 1�,,l C. CITY'OF F'ORT'WORTH WATER DEPARTMENT 17' wholesale rate calculation methodology,, modifications format established in the uniform wholesale contract Nvifl be made, as appropriate, pertaining to each of the and consistent with previous presentations and reports. following areas: Tie following reports and deliverables are included as a part of the proposed study(note all dates are tentative): Normalization of Wastewater Volumes. Ile influ- ence of dry and wet weather years on the annual sales S TASK A. RATES SUB-COMMITTEECOST OF volumes of custorners can cause wide variations in SERVICE PROCESS WORKSHOP AND REVIEW OF calculated rates from year to year. Normalization of PRELIMINARY DRAFT COST OF SERVICE AN'D RATE wastewater volumes over a period ranging from 3 to REPORT "I ki 10 years has been investigated in a previous study. It Deliver an overview of the cost of service study process was noted during the process that a change to flow and preliminary cost of service and rates, overview to normalization would require a contract amendment the Rates Sub-Committee on or about May 23, 2013. and the Water Department would concurrently re- Also, the Preliminary Draft of the Rate Report will be quire normalization of the wholesale water customer due on the date of this meeting, and the Project Team service units. Staff will work with the Sub Corr to review any questions,comments,or concerns they may have. Application of Measured Strength to Billed Volume. To normalize the application of measured concentra- SUBTASK 8:WCAC MEETING TO RECEIVE AND REVIEW tions of BAD and TS to billed monthly volume, an 1ST DRAFT COST OF SERVICE AND RATE REPORT evaluation of the process of recognizing a "pound is a The 1st Draft of the Rate Report will be presented to pound"will be conducted,as required. the WCAC and Project'ream staff will work with the WCAC to review any questions,comments',or concerns Fixed..Asset Accounting/Record Keeping. Discussions they may have on or about June 6,2013. will be held with Department staff to reassess fixed as- set tracking capabilities arld methodologies pertaining SU,BTASK C: RATES SUB-COMMITTEE MEETING TO to recording and maintaining fixed asset investment REVIEW FINAL DRAFT RATE REPORT data, and make recommendations, if necessary, for im- Depending on the changes necessary to address corn- provements,pertaining to wholesale rate determination. ments,, questions and concerns from the review of the 1st Draft Rate Report,it may be necessary to review the Engineering Assumptions. Engineering assumptions Final Draft Rate Report to the Rates Sub--Cori mittee incorporated in the current wholesale ratemaking on or about July 11,2013. methodology will be reviewed for applicability and ap- propriateness. SUBTASK D: 'CAC TO RECEIVE,FINAL DRAFT RATE REPORT Tie Final Draft Rate .eport will be presented to the WC AC on or about July 18, 2013. The Fitnal Draft 17,ASK III: REPORT'S / PRESENTATIONS Cost of Service and Rate Report will be due on the date / 0ELIVERABLES of this meeting. I'lie of th,is task is to provide f I lie 1�ates Sub-Coi,"'n,rriittee arid the; Wholes,,(ale Cj_istaa",te,r ,Adviso,ry Cbrnrriittee (th,e WC,�kC'.) wltfi the ap- propriate diocumenta tic)n and �re,ports f'ar the -r ple te d in rfasllisl ' :id [1. 'e Project Team, will provide the Rates Sub-Com- mittee and the WCAC with several presentations and reports during the course of the study presenting the finding's. Tiese presentations and reports, will be in the CITY O,F FORT WORTH WATER' DEPARTMENT 'AP'IELIS i:INANCIAL CONSUL-r,mITS, INC.. This page, intent ionaLly Left blank to faciLitate two-sided printing, JIM ?A F T E L 1 15 F I N A N C D 14 S U L'T'A N"I"S. H04 C. CITY OF FORT WORTH WATER DEPARTMENT 19 A"9L ER � CE %3 FEE Fu 11 As requested, Raftelis Financial Consultants, Inc. (RFQ has provided a proposed fce, including estimated hours by task, to complete the Study.Tie table below details the estimated hours and billing rates, for each consultant and support related to each task of our Project Approach.We typically bill monthly based on hours arid expenses,(with no mark-up). 1he proposed fee is based on our understanding ofthe Citys objectives as set forth in the RFP The Proj ject learn is wining to modiif�the ProJIect Scope and cost as outlined in this proposi'll as riccessary 'to ensure that the City's o�jectives will be rnet by this project. Witli.arn Stannard,who signed the cover letter of this,pr sal is the President and CEO of'RFC and is entitled to represent our firm,empowered to submit the bid,,and authorized to sign a contract with the City of Fort Worth.,'In Appendix C of this proposal,we have included a copy of the Board Resolution of RFC which certifies this. Hours Requirements VVilliarn Staninlaird, Thomas Beckleyt Rocky Craley,Lead Administrative Project Director Project Marra err Consultant Support I Project initiation and Management 8 12 12 4 II Wholesale Wastewater Cost of Service Study 8 12 56 III Re p,orts/Presentationsi/Del er,ablea 8 48 20 8 Total',estirnalted hours 24 7,2 88 1!2 Hourly rates $1 325 $1 210 $ '185 S 60 Cons,ultan,t Fees' $ 7, 00 $ 15,120 $ 16,,28 $ 720 Estimated Fees $ 39,920 Technology and Communication Charges $1 1,,8410 Travel Expenses $ 2,800 Total Estimated Fees and Expenses 44$560 MIN 20 CITY OF FORT WO,RTH WATER DEPARTMENT Ai:TELIS FINANCIAL CONSUL"rAN'rS, 04C. This page 'Intentionally left blank a .i + two-sided printing. F T F L 15 F I N A N C I A L CON 5 U ,.'ANT m 1""1 C. CITY'OF FORT WORTH WATER DEPARTMENT 21 M M RFP AFIFIRMATIO I S "'IRM"S INDEPENDENT OF TH�E CITY OFFORT WORTH Raftelis Financial Consultants, Inc. is independent of the City of Fort Worth as defined by the U.S. General Ac- counting Office's Government Auditing Standards (1989). IMMEGAL / 01SCIPLINARYACTIONS 'There have not been any ,, nor are there any pending,legal or disciplinary actions against Raftelis Financial Consult- ants,,Inc.during the past three years by any repilatory bodies or professional organizations. 0"lNGAGEMENTS, WITIA THE CITY OF FORor WORITH, Raftefis Financial Consultants, Inc. has not had any engagements with the City of Fort Worth during the past three years. i'VORKING PAPER RETENTION AND ACCESS TO WORKiNG PAPERS If awarded this contract, Raftelis Financial Consultants, Inc. will retain, at our expense, all working papers and reports for a minimum of three years, unless we are notified in writing by the City of Fort Worth of the need to extend the retention period.We will rnake working papers available,upon request,to the following parties or their designees*. a) City of Fort Worth b) Proposal Evaluation Committee c) Wholesale Advisory Committee In addition, Rai telis Financial Consultants, Inc. wilt respond to the reasonable inquiries of successor consultants and allow successor consultants to review working papers relating to matters on continuing accounting significance. 22, CITY OF FORT WORTH WATER DEPARTMENT F T E L i S F I N A 14 C I A L C.0 N S U UT A N T'S, kil C This page intentionalLy Left bL,ank to faciLitate two-sided printing. .............. gut F TELIS FINANCIAL CONSULTANTS, HINC., CITY OF FORT WORTH WATER DEPARTMENT 23 0 Emi a Ar MAW A, M APPENUIA An PRUJEC,T TEAM RESUMES Technical,Specialties )VILLIAM STANNARD, PE > Cost of service and,rate studies ?ro 'nct mirector(President and CEO, RFC) > Financial planning studies > Valuation and acquisitions PROFILE > Bond forecasts and examinations Mr. Stannard has more than 35 years of experience providing con- > Regioinatization studies SUlting services to investor and municipally-owned utilities covering > Management policy and practice management,operation,ecoinomic,and financial matters,.His extensive > Environmental finance&accounting experience encompasses formulation of financial systems and ordi- Professional History nances for compliance with regulations regarding the Clean Water Act > Raftells Financial Consultants,Inc..- and the Safe Drinking Water Act; comprehensive revenue require- ments and cost of service studies; consulting engineers and financial, Chief Executive Officer(2011-present]; President(2008-p resenth Vice feasibility reports related to the sale of revenue bonds; financial fea- I sibility analyses; or and management reviews; arid utility President(20,02-20108) competitiveness smidies.He has served as an expert witness in rate fiti- > Black&Veatch:Senior Vice President 0 1. (ration matters in rederal and state courts and before arbitration panels (19,96-2002);Vice President(1992- Z7� 1996);Project Manager(1984-1992); and state public service comi-nissions. Mr. Stannard has also served Assistant Project Manager(1980- as an arbitrator in resolving water and wastewater rate disputes. Mr. 19841-Staff Consultant 11975-1980) Stannard has been an active member of the WEF and AWWA. He served as chair of the WEB` task force charged with the development Education of a Manual of Practice, Finnan Lingand. Charges for Wastewater Sys- > Bachelor of Science in Business tens.Mr. Stannard was also a contributing author for the book Water Administration-Kansas State University and��astewater Finance and Pricin': A Comriehensive Guide laird (19751 FdidQ n . is authoritative text is used by utility managers and con- > Bachelor of Science in Civil sultants throughout the United States,. He is a past-chair of AWWA:s Engineering- Kansas State University Finance, Accounting and Management Controls Committee, and a (1975), trustee of AWWA's Management and Leadership Division. Professional Registrations RELEVANT PROJECT EXPERIENCE > Registered Professional Engineer:KS, Tarrant Re ional Water District(TX) OH,MA,,MI 91 Mr. Stannard served as Project Director on a project for the Tarrant Professional Memberships, Regional Water District (TRWD) to study the financial, economic, > American Society of Civil Engineers and policy impacts of' a proposal that TRVV-D pay communities for > Amierican Waiter Works Association: wastewater effluent discharcred into the Trinity River which would Past-Chair of Finance,Accounting and subsequently be used to augmentTR"M's raw water supply. Management Controils Committee; Trustee,of Management and Little Rock Wastewater Utility(AR) Leadership Division;Texas Section Mr. Stannard is Project Manager for a comprehensive wastewater f, Pates Committee nancial 1 planning, cost of service and rate study for the City of Little > Water Environment Federation.-Past- Rocles, Wastewater Utitity (LRW). In addition to the cost of service 1 -1* Chair-Task Force on Wastewater analysis, this project includes a feasibitity study of alternative system Charges growth charges and a system value determination. LRW is in the > Listed in Best Lawyers in America- midst of a major capital improvement program to address wet weather director y of Expert Witnesses flow management issues."Ilie program includes construction of a new > Listed in Who's Who in Science and wastewater treatment plant and,as such,LRW is interested in assess Engineering ing the feasibility of instituting, a system development charge to be "kFTFUS r"INANCIAL CONSOLTANTS, INC. 24 CiTY OF FORT WORTH WATER DEPARTMENT 'Me system valuation ele- sis and design of water rates., In addition to its retail lippl lied to new customers. nient of the project will be an integral step in LRW'S customers, the City also provides water service to 19 ongoing asset management program development. wholesale customers, which use approximately 60% of the water produced. A key element of the engagement City of Hobbs(NM) involved rneefings,with each of the wholesale customers, N/fr Stannard has been the Proj1ect Manager on the C"Ity to explain in detail the cost of service allocation meth- . of Hobbs (City) water and wastewater rate study. 'Me odology and the effect on the customer's water,rates. City was faced with significant capital expenditures to upgrade their wastewater treatment plant and wanted to City of Wyoming(MI) ensure that the water and wastewater utilities were op- Mr. Stannard was the Project Manager for RFC's en- orm erating in a self-sufficient manner. RFC worked with gageme,nt with the City of Wyoming (City) to perf . City Staff as well as the City Council and Water Board a water cost of service study and to provide assistance in to determine the City's rate setting goals,.: RF1C then the negotiation of new wholesale contracts for water and developed water and wastewater rate structures that wastewater service. the City engaged RFC to perform addressed these goals, in particular, conservation,, while a water cost of service study to support the negotiation providing for adequate capital financing. of new wholesale water contracts. RFC also provided r,ovi 1 expertise in areas including rate of return,cost of service City of Wichita(KS) �dlocations,industrial surcharges,and rate design. As ProJect Manager,, Mr. Stannard assisted the City of Wichita (C'ty) i I n performing an analysis of wholesale City of Lee's Summit(MO) water rates by evaluating billing data for the past three As Project Manager, Mn Stannard performed compre- years for all of the City's wholesale customers and pro- hensive water and wastewater cost of service studies for vided recommendations to improve the recovery of the City of Lee's Summit (City) as well as provided an revenue requirements from these customers. RFC has update of the City's system development charges col- also performed a rate study to determine a raw water lected from new customers. rate for a proposed new industrial customer seeking ser- vice from the City. R,FC also analyzed the City"s rate City of Kansas City(MO) structure to determine its effectiveness for providing sta- Mr. Stannard served as the Project director for a ble revenues during varying weather conditions. wastewater financial planning and cost of service study for the City of Kansas City Water Services Department City of 01athe(KS) (Department). The project included development of a Mr. Stannard has been the Project Manager on a series comprehensive financial plan, cost of service analysis of engagements for the City of Olathe (City). RFC and design of wastewater rates. In addition to its retail first performed an analysis of the City's existing System customers,, the Department also provides wastewater Development Fee methodology and provided quid- service to more than 20 wholesale customers. A key ance on how the fees could be updated and improved. element of the engagement involved a detailed analysis R.FC provided the subsequent revisions and updates of the costs of the system components which serve the and presented these findings, to City,Council. RFC has wholesale customers to serve as the basis for a move to subsequently been engaged by the City to analyze pro- cost of service based rates for the wholesale customers posed wastewater impact fees that would supplement in place of the historic practice of tying the wholesale system development charge revenue, to update the rates to the inside City retail rates. city's cost of service computer model,and to assist with the determination of wholesale wastewater rates. Fort Gratiot Township(MI) Mr. Stannard served as the Project Manager on an City of Saginaw(MI) engagement t"or Fort Gratiot Township, Michigan Mr. Stannard served as the Project Manager for a wa- (Township) to review proposed water rates from the ter cost of service encragement for the City of Saginaw City of Port Huron (City).'ffie City provides wholesale (City). 11e engagement included development of a water service to the Township and the Township was comprehensive financial plan, cost of service analy- concerned about the level of proposed rate increases '�AFTFFLI S F1 INANCIAL CON SUL'r,ANTS, i t4,4C. CITY OF FORT WORTH WATER DEPARTMENT 25 they were facing FInd, hence, engaged RFC to review hensive water and wastewater rate study for the City of the proposed rates to ensure they were appropriate. Naperville (City). the scope of work included develop- City of Detroit(MI) ment of financial plans for the water and wastewater utilities, cost of service analyses, and design of proposed Mr. Stannard served as Protect Manager Principal rates, to fund the projected revenue requir,ements for the in Charge for various pro)ects for the City of Detroit two utilities.The findings of the study were presented to (City), including comprehensive water and waste- the City Council which approved the proposed changes water revenue requirements, cost of service and rate in rates including a purchased water component which design studies- consulting engineers/feasibility reports will serve as a pass through, to reflect, the rates for water for over S12 billion of water and wastewater system purchased from the Du Page County Water Commission., revenue bonds; an automated capital improvement program management and tracking system; and an Northwest Water Commission(IL) automated work order tracking system. The rate study Mr. Stannard has served as principal-in-charge for engagements included development of user-friendly, several engagements for the Northwest, Water Com- Windows-based, rate models, initially using Lotus mission (Commission). Jhese engagements have 123 and, subsequently,Microsoft Excels for use by the included review of water rates charged to the Com- City's, rate and finance staff mission proposed by the City of Evanston (City) and assistance with negotiation of the rates to be charged City of Grosse Pomite(MI) under the terms of the Commission's contract with the Mr. Stannard served as Pro ect Manager to the City City I and a determination of the current value of the 1 0 of Grosse Pointe Michigan (City) performing a corn- Commission's water system assets. Currently, RFC, is prehensive water and wastewater cost of service study developing proposed water rates for potential service to including bench marking analysis allowing the City to new contract customers. compare, their performance with respect to key per- formance criteria to the performance of other similar City of Suffolk(VA) utilities. Mr.Stannard has also been responsible for the Mr. Stannard serves as Project Director for RFC`s development of a ten-year financial plan for the City's multi-year engagement with the City of Suffolk (City) Utilities Department, and creation of a financial plan- to provide financial services to the City's Department riing and rate model for use by City staff in preparing of Public Utilities (DPU)A1ie scope of services include annual updates,to the water and wastewater rates. an -annual update of the ten-year comprehensive finan- cial plan, determination of water and sewer costs of Northeast Ohio Regional Sewer District(OH) service,development of proposed,water and sewer rates Mr. Stannard served as Project Manager in the level_ for the upcoming fiscal year, and an assessment of the opment of a comprehensive financial plan for the five City's water and sewer system availabihty fees. In addi- year period 2007 through 2011. The financial plan Lion, RFC also conducts an annual true-up analysis for included projections of customers, water usage and wholesale water service to the Authority. The true up revenues tinder the existing rates,projections of operat- analysis recalculates the water rates using actual cost Ing and maintenance expense, debt service on existing and water usage data to determine the actual cost-of- bonds and additional bonds necessary to fund the capi- service for the Authority during the prior year. tal improvement program, and reserve fund deposits. In addition, RFC recommended a rate adjustment City of Baltimore(NID) program over the five year study period to meet the INIr. Stannard serves as the Project Director on this projected revenue requirements and m aintain the is multi-year engagement with the City of Baltimore's trict's financial sustainability. A user-friendly computer bureau of Water and Wastewater (City). Tae engage model was also developed for use by District staff to ment encompasses a variety of cost of service and rate ,analyze different planning scenarios. studies for the City's, water and wastewater systems. He is currently leading our Firm's wastewater cost of service City of Naperville(IL) analysis and development of high strength surcharge Mr. Stannard served as Project Director for a compre- rates in accordance with EPA user charge regulations,. FT E I_I S F1 N�A N C I A L 0 N S U LT A N T S,1,�4 C 26 CITY OF FORT WORTH�WATER DEPARTMENT Other components of our engagement with the City City and County of San Francisco(CA) include review and evaluation of cost allocations to the Mr. Stannard serve�d as Project Manager on an en- C 4 ),s wholesale water and wastewater customers in ac- gagement with the San Francisco Public Utilities ity cor�dance with the water and sewer service agreements. Commission, (SFPUC) in the development ofcontract negotiation strategies regarding the renegotiation of Loudoun County Sanitation Authority(VA) SFPUC,I s wholesale water service agreements with 'it Mr. Stannard served as the Project Director on two wholesale water customers. A major component of Mr. engagements for Loudoun County Sanitation Author-, Stannard"s work included the analysis of the, 'Impact of ity (Authority), a cost of service rate study and a bond SFPUC's, $4.5 billion capital improvement program on feasibility study.Ihe Authority's goal for the rate study the overall financial plan and the allocation of costs to was to maintain the, current rate structure and mini- the wholesale customers under the utility bas,is of cost mize rate increases whi.le still preserving a sufficient allocation as well as the cash basis to determine the fund balance to meet all internal coverage requirements. short, mid, and long term impacts on retail rates and Tie follow-up bond feasibility study used the newly de- wholesale rates. v�elop:ed rate model to ensure the Authority's financial capability to issue new debt. City of San Di-ego(CA) Mr. Stannard served as the Principal-in-Charge for a City of Portland(OR), rrianagement review of the City's Water Department, Mr., Stannard was Project Manager for an engagement 'ffils review was driven by City Council concerns about for the City of Portland Water Bureau (Bureau) which the overall management of the Department and several provides retail water service to customers within the City specific areas within the Department, as identified by and wholesale water service 'to 19 agencies under agree- the Council. Ihe City Council directed a very tight ments that will expire within the next couple of years. time schedule fo�r the proj�ect, which was completed RFC's scope of work was separated into two parts: as- within two months. In order to accomplish the croals sistance in developing wholesale rates and development of the project within this schedule,separate work teams of a robust modeling tool for onging rate calculation and were formed for each of the assigned areas. 'Me sys,- financial planning use by the Bureau., tematic approach provided an efficient, thorough and comprehensive review of each functional area while al- St.Louis Metropolitan Sewer District Rate lowing the project team to successfully conform to the Commission(MO) tight schedule. Mr. Stannard served as Project Manager fo r RFC's engagement as rate consultant to the St. Louis MSD City of Los Angeles(CA) Rate Commission. As the Commission's rate consult- Mr. Stannard served as Principal-in-Charge for the ant, Mr. Stannard was responsible for performing an best practices study for the Los A_ngeles Wastewater independent review of MSD's proposed wastewater Program. Ihis pro' I * ject built on the City's efforts con- and stormwater�rates covering the period 2008 through ducted during the five years prior to the best practices 2012. 'Ihe project 'Included a detailed ewrduation of the study duxing which the City,working through 'Its Labor cost of service studies supporting the wastewater and Management Committee, had reduced the program's stormwater rates, an evaluation of proposed policies for ffill-tirne employment by 28 percent. The best practices implementation of the rates, and examination of the study covered every aspect of the organization including level and phasing of annual rate adjustments proposed plants, collection system, engineering, finance, account- during the five-year study period. Mr. Stannard was ingl human resources, billing and coLlection, customer also, responsIble for submitting testimony and exhibits service,consmiction management,and many others, As for the rate hearings conducted by the Rate Commis- a result, additional savings of nearly 20 percent were sion and assisted the Cornmission�s Counsel in cross lidentified over the ensuing five-year period, utilizing 1 NISD witnesses and w' '"flie projected savings, examination of i itnesses of the normal attrition in lieu of layoffs. various interveners in the case. incorporated business process changes that Nvere, identi- fied and evaluated as part of the project with a significant imp A I FTEUIS FIN.A NC 1A I L CQ-N SUL I I'A 11 N T 5, 1�14 C. CITY OF FORT WORTH WATER DEPARTMENT 2'7 portion of the savings to be achieved in the areas of sup- > San ikntonio Water System (,rx) —Water and Slew- port services and capital improvement programs. er Rate Study City of Cincinnati,(OH) > City of Warren (MI) — Water Rate Litigation Sup- port '1r. Stannard served as the Partner-in-Charge for > United States Navy, Norfolk (VA) Water Rate the pro.ject team engaged by Cincinnati Water Works Review C, (CVVW) to work with CWW's Executive Management Team in development of' their first Strategic Business Plan. 'Me work on this project included a complete em- ployee survey, outreach with key external stakeholders, multiple workshops with the Executive Team and staff representatives for development of CWW's, vision and inission, as well as go,,ds, objectives and strategies, and leading multi-disciplined C,WW teams in development of specific action plans. T-ie result of this engagement was a comprehensive business plan which established a road map for the utility over the coming decades. City of Philadelphia(PA)l Mr. Stannard is serving as a water, rate expert, assisting the City of Philadelphia in a water rate dispute with one of the City's major wholesale customers. Dispute resolution will be accompl-ished through arbitration where Mr. Stannard will provide expert testirriony in support of the City's water cost of service analysis and rate design. He is also assisting the City in developing the overall strategies for crafting the City's case. Other Relevant Project Experience > Arlington County (VA) — Alternative Rate Struc- ture Analysis, Financial Planning, Availability Fee Development,and Public Involvement Program > Allegheny County Sanitary Authority (PA) — Rate Study,Industrial SC Review > City of Columbus (01-1) — Water and Wastewater Rate Study > City of flenderson (NV) — Water and Wastewater, Rate Study > City of Lexington (KY)—Water System Valuation > City of Loveland FI) — Evaluation of Wastewater Service Alternatives > City of Kalamazoo (IVII)—Wastewater Rate Review > City of Kansas City (MO) — Wastewater Cost of Service Study > City of,,N/1acomb (MI),—Wastewater Rate Litigation Assistance and Feasibility Analysis for Acquisition > Oakland County (ill) — Water and Wastewater Rate Review aiid,,Vlaster Plan Financial Analysis 10 28 CITY OF FORT WORTH WATER DEPARTMENT ',AFTELIS F11",4A IN,ICIAL CONSULTANTS,INC. ......... ...... Technical Specialties TOM BECKLEY > Utility Cost Ofservice and rate pro,ject manager (Manager, RFC) structure5tudies > Conservation rate studies PROFILE > Bond forecasts and feasibility Mr. Beckley has over ten years of experience with RFC 'in conducting fi- studies nance related projects. He has assisted a wide range of municipal water and > Economic feasibitity studies i *'I* * i 1 1 1 privati- > Industrial waste charge wastewater uti,Ities in conducting cost of service financial feasibility studies past fee,and other finance related studies.Some of his > Capital recovery fee studies past clients include: San Francisco Public Utilities Commission (CA); City of Phoenix (AZ); City of Peoria (AZ); City of Naperville (IL); Northwest Professional History Water Commission (IL); City of Hobbs (NM); Birmingham Water Works > RafteLis Financial Board(AL);City of Orlando (FL);Arlington County(VA); Loudoun Coun- Cons,uLtants,Inc.:Manager ty Sanitation Authority (VA); City of Suffolk (VA); City of Saginaw (MI); (2000-present), City of Wyoming (MI); City of Grosse Pointe (MI); City of Edenton (TX); Education and City of Olathe (KS). > Master of Public RELEVANT PROJECT EXPERIENCE Administration-University of City of Wichita(KS) Kansas(2008) Mr. Beckley is serving as Project Manager for a cost of service study for the > Master of Business City of Wichita's (City): water and wastewater utility RFC was engaged by Administration(Concentration the City to, perform a comprehensive cost of service study to address revenue in Finance)-A.B.Freeman shortfalls caused by, declining usa re in the City and to fund a large water School of Business,Tulane g University(2,010,01 source of supply project. RFC worked with the City to allocate costs between > Bachelor of Science,Naval the water and wastewater utilities and to,functions in each utility to determine t of service Architect cos ure and Marine for each of the City's customer classes. RFC, then worked with Engineering-Webb Institute the City to determine appropriate rates,that not only recovered the City's cost of service,but also addressed their concerns related to revenue stability. RFC l is also working with the City to develop a proforma model that will be used Professional Memberships by City staff on an ongoing basis as a rnariagement decision tool based on the > American Water Works City"s actual experience during the course of each fiscal year. Association > International Water In a previous engagement with the City,Mr. Beckley served as Lead, Consult- Association ant and assisted the City in performing an analysis of wholesale water rates by > Water Environment evaluating billing data for the past three years for all of the City's wholesale Federation customers and provided recommendations to improve the recovery of revenue reqWremients from these customers. RFC has also performed a rate study to, determine a raw water rate for a proposed new industrial,customer seeking ser- vice from the City RFC. also analyzed the City's rate structure to determine its effectiveness for providing stable revenues during varying weather conditions. City of Suffolk(VA) ,NJr. Beckley serves as Project Manager for RFC's multi-year engagement with the City of Suffolk(City) to provide financial services to the City's De- partnient of Public Utilities (DPU).the scope of services includes an annual update of the ten-year cornprehensive financial plan, determination of water and sewer costs of service, development of proposed water and sewer rates for the upcoming fiscal year, and an assessment of the City's water and sewer system availability fees. In addition, RFC, also conducts an annual true up J A,FT I FF L IS F I INA A,L 1-11 CON-S 1)LT A N-T 5, 1 N C. CITY OF'FORT WORTH WATER DEPARTMENT 29 analysis for wholesale water service to the Authorigy est engagenient was to perform a water cost of service Re true-up analysis recalculates the water rates using Study and to provide assistance in the negotiation of actual cost and water usage data to determine the actual new wholesale contracts for water and wastewater ser- cost of service to the Authority during the prior year. vice.1-he City engaged RFC, to perform a water cost of service study to support the negotiation of new whole. Kansas City Water Services Department(MO) sale water contracts.R147C has also provided experti,se in Mr.Beckley served as Lead Consultant for a wastewater areas,including rate of return,cost of service allocations, cost of service and rate study for the Kansas City Wa- industrial surcharges, and rate design across several en- ter Services Department (Department). RFC prepared cragementswith the City. as financial plan for the wastewater utility, forecasted revenue requirements, and determined the City's cost City of Grosse Pointe(MI) of service to its various customer classes and wholesale Mr. Beckley serves as Project Manager to the City of customers. A cost of service analysis and review of the Grosse Pointe (City) performing a comprehensive City's wholesale contracts provisions resulted in the de- water and wastewater cost of service study including veld meat of wastewater rates which were approved by benchmarking analysis allowing the City to compare the City Council. their performance with respect to key performance cri- teria to the performance of other similar utilities. Mr. City of Hobbs(NM) Beckley has also been responsible for the development Mr. Beckley has been the Lead Consultant on the City of a ten year financial plan for the City's Utilities De- of Hobbs (City) water and wastewater rate study, 'Me partment, and creation of a financial planning and rate City was faced with significant capital expenditures to rnodel for use by City staff in preparing annual updates upgrade their wastewater treatment plant and wanted to to the water and wastewater rates. ensure that the water and wastewater utilities: were op- crating in a self-sufficient manner. RFC worked with Fort ratios Township(MI) City staff as well as the City,Council and Water Board Mr., Beckley served as the Lead Consultant on an en to determine the City's rate setting goals. RFC, then gagement for Fort Gratiot Township (Township) to developed water and wastewater rate structures that review proposed water rates from the City of Port Hu- addressed these goals; in particular, conservation, while ron (City), Re City provides wholesale water service providing for adequate capital financing. to the '-fownship and was concerned about the level of proposed rate increases they were facing, so they en- City of Saginaw(MI) gaged RFC to review the proposed rates to ensure they Mr. Beckley served as the Lead Consultant for several were appropriate, water costs of service engagements for the City of Sag- inaw (City). 'These engagements include development City of Lee's Summit(MO) of a comprehensive financial plan,cost of service analy- As Lead Consultant, Mr. Beckley performed compre- sis and design of water rates. In addition to its retail hensive water and wastewater cost of service studies for . I I customers,, the City also provides water service to 19 the City of Lee's Summit (City) as well as provided an wholesale customers, which use approximately 60% of update of the City's system development charges col_ the water produced. A key element of the engagement lected from new customers. involved presentations to the wholesale customer group and meetings with individual wholesale customers to Northwest Water Commission(IL) explain in detail the cost of service allocation method- Mr. Beckley is serving as project Manager for RFC ology and the effect on the customer's water rates. engagement with the Northwest Water Commission (Commission), a wholes-ale water provider located in City ofWyorning(INII) the northwest Chicago suburbs. '11e. Commission Mr. Beckley has served as Lead Consultant and Pro- engaged RFC, to review its assets and determine a ject Manager for several engagements with the City of valuation for use in potentiaRy providing service to kvyoming(City)over the past seven years. RFC's larg- additional custorners. RFC is also assisting the Com- 3 0 CITY OlF FORT WORTH WATER DEPARTMENT ,,44FTELIS �`IAINAA NCI AL CONSULT,Awvgym i r4 c. mission in analyzing potential methodologies for for the past several years, updated the County's Sys- /_`4 f recovery of costs from potential customers,, including tern Development Charge methodology, conducted potential rates., pricing objective workshops with County staff as well ; 1 as a citizens 1 advisory group that provided input into City of NaperviHe(I Q the rate setting objectives for the cost of service study. .%,,Ir. Beckley is serving as Project iManager for RFC RFC has also assessed the equity of existing user rates engagernent with the City of Naperville (City). 'ffie arid charges and evaluated the customer impacts as- City has engaged RFC to provide de a comprehensive cost sociated, with alternative rate structures. In addition, of service st-udy for their water and wastewater utility the County has also requested assistance in evaluating financing alternatives,related,to its capital improvement and propose updated rates to meet the City's pricing objectives. RFC worked with City staff to determine program,which may also include the utifization of the their pricing objectives in a workshop setting and then rate model to facilitate the preparation of a written fea- Lised the results of that exercise to propose cost of sibil.ity report to be used by the County in obtaining a service-based rates that met those objectives. `The City bond rating or credit enhancement for debt obligations. has also engaged RFC to provide assistance in updat- RF'C is also develo,pling new infrastructure availabil- ing their contract for wholesale wastewater service with ity fees for the County along with a model for use by the City of Warren. RFC is working with the City to County staff in the future. ensure that the contract is recover"ing the appropriate costs related to their service to the City of Warren. Town of Grand Lake(CO) Mr. Beckley served as the Project Manager fora water City of Olathe(KS)i rate study for the Town of Grand Lake (Town). 1he Mr., Beckley has been the Lead Consultant on a series 'Town's water utility serves approximately 950 custom- of engagements for the City of Olathe (City). RFC. ers in and around the Town. RFC was engaged by the first performed an analysis of the City's existing System Town to determine revenue requirements for the utility, I" I Development Fee methodology and provided guid- prepare a,financial plan that provided for funding of the ante on how the fees could be updated and improved. utility's operations and maintenance as well as capital RFC provided the subsequent revisions and updates requirements, and propose rates to recover the neces- and presented these findings to City Council. RFC has nary revenues. RFC worked with Town staff to develop subsequently been engaged by the City to analyze pro- an appropriate financial plan and presented the results posed wastewater impact fees that would supplement to the Town's NMayor and Board in a public meeting. system development charge revenue, to update the City's cost of service computer model,and to assist Nvith Loudoun County Sanitation Authonity(VA) the determination of wholesale wastewater rates. Mr. Beckley served as the Lead Consultant on two engagements for Loudolun, County Sanitation Author- City of Phoenix(il ity(Authority),,a cost of service rate study and a bond Mr. Beckley has assisted the City of Phoenix (City) feasibility st-Lidy. 1he Authority's goal for the rate study by providing bond feasibility analyses and parity test was to maintain the current rate structure and mini- certifications for over S1 billion in water and waste- mize rate increases while still preserving a sumcient water revenue blonds over the past 101 years, including fund balance to meet all internal coverage require - a S6o0,,0100,:000 in Junior Lien Water System Revenue nients. 'The follow-up bond feasibility study used the Refunding Bonds, issued in 2005, "lliese engagements newly developed rate model to ensure the Authority's included reviews of the City's financial statements, and financial capability to issue new debt. Iti other financial data to prepare the feasibility analyses and parity test certifications,. City of Peon*a(AZ) In February 1998, the City engaged RFC to, conduct Arlington County(VA) a comprehensive water and wastewater rate and finan- IN,Ir. Beckley has been the Lead Consultant on a series cial planning study, which incorporated a water and of engagements forArlington County (County). UC wastewater,utility rate study, an update olf its water and has conducted cost of service studies for the County wastewater development fees,the development of a wa- F T E L�S F�N1 A N C I A L C 0 N S U LFA NTS, I N C. CITY OF FORT WORTH WATER DEPARTMENT' 31 ter resource fee,and the development of an appropriate > City of Providence (RI) - Rate Filings (multiple) financial plan and bond feasibility forecast. 1-011owing > Saginaw- lid anicip Water Supply Corpo- iN and 'dun i al these initial engagements RFC has assisted, the City 1 2 - 1-7easibility Study in ration (1VII) updating its water and wastewater rates,utility financial > City of San Francisco (CA) - Wholesale Water plan, and utility development fees on a biennial basis Contract Negotiations (4-2000,2002,20�014 and 6 . As part of these updates, > St., Louis, Metropolitan Sewer District (IN10) - Rate the City implemented a uniform service area approach Change Review(multiple) to determining its development fees. > United Statics Navy- Rate Review and Negotiations In 2003, RFC further assisted the City in determining utility development fees for a separate service area lo- cated west of the Aqua Fria River. Although the City assesses uniform water and wastewater development fees to customers in afl other areas of its water and wastewa- ter system, proposed development in this independent service -area requires significant investrnerit in capital improvements and cervnin portions of the required in- frastructure will be financed through a Community Facilities District. Since these fees will be separate and unique from the fees assessed to other customers within the City's current service area, the City requested that RFC, calculate the fees based upon the specific costs for the infrastructure they are intended to recover. Other Relevant Experience > Allegheny County Sanitary Authority(PA) - Indus- trial Surcharge Review and Rate Study > Birmingham Water Works Board (AL) - Bond Fca- sibility Study(2) > City of Baltimore (MD) - Cost Model,Wastewater Rate Study,and Water Rate Arbitration Assistance > City of Gladstone (MO) -Wholesale Rate Review > Harlingen Water Works System (TX) - ''Water and Wastewater Rate Study > City of Liberty NO) -Wholesale Rate Review 1 R) - - > Little Rock Wastewater Util.ity (A Cost of der vice Study and Model, Rate Advisory Committee Assistance, Rate Review, System Growth Charge Study,and Valuation Study > City of Macon ib (MI) - Feasibility Analysis for Ac- quisition, and Wastewater Rate Litigation Assistance > City of Naperville (1L) - Water and Wastewater Cost of Service Study, > Nletropolitan Government of Nashville and David- son County Water,Services (""'17N) - Budget Review > Oakland, County (MI) - Water and Wastewater. iNlaster Plan Study > Peace River Manasota Re authority gional Water Autho (FL) Feasibility Study ��,A F TE L I S F!N A N C I fit. C 0 N S U UA N T 5,1 N,C- 32 CITY OF FORT WORTH WATER DEPARTMENT ........... Technicat SpeciaLties 10CKY CRALIEY > Rate structure studies Consultant (.15enior f,onsuit"-int IRK) > Surveys and ben chma akin g analyses, PROFILE Professional History �Vlr, Craley joined RFC, at,the 1.beginning of 2008. He has a highly analytical > Raftekis Financial. ackground,and his expertise lies in data,compilation,analysis,and modeling. Consultants,Inc.:Senior Since joining RFC, lie has served as a consultant on numerous water and wastewater rate and cost of service studies. Additionally, he has had the op- Consultant(2011-present); pormnity to work on a wide range of other projects involving public-private S�taff Consultant 12008-20111 partnerships,,rate differentials,risk analysis, and utility policy.I'Vir.Craley also 4, Education manages RFC's many Survey efforts, including the biennial national Wa- > Master of Science-Carnegie ter wid Wastewater Rate Su X co produced with AWWA and the till Melloin University(200611 Fin vial Infban-ation Survey produced by ANIWA. Mr. Craley is an active > Bachelor of Arts Princeton member of WEF,and WEFS Utility Management Committee,and he serves University 1,2004) on the WEF'TEC Planning Committee. He is also a contributing author for the 4th edition of Water and Waste ater Finance and Pri A Goer pre- hers ivt:Quide to be released in 2013. IRELEVANT PROJECT EXPERIENCE San,Antonio Water System(TX) Mr. Clraley served as, staff consultant for a colmpirehens�ive cost of service and rate study for the San Antonio Water System (SAWS). During this pro- ject, RFC prepared and facilitated a rate setting workshop for SAWS staff I - developed a compre- and members of a Rates Advisory Committee (RAQ, hensive cost of service/rate model that calculated conservation water rates for residential,, commercial, industrial and wholesale customers,. in addition, RFC developed a wastewater rate model that calculated residential waste- kvater rates and high-strength surcharges. As part of this project, RFC also reviewed SAWS' impact fee calculation methodology; develop�ed recycled water rates; reviewed chilled water and steam rates, in addition to assisting SAWS with the development of various rniscellaneous, charges. Mr. Craley primarily assisted with modeling the rates and financial plan for water and � recycled water service. Central Arkansas Water(AR) RFC is currently assisting Central Arkansas Water (CAW) with a compre- hensive cost of service and rate design st-udy. Serving as Lead Consultant for the project, he is developing the rate and financial planning model for CAW. RFC. is also assisting CAW with planning capital spending, including two, Z:) upcoming debt issues and significant rate funded capital. RFCs recommen- dations will be the foundation for the adoption of a three-year rate forecast for 20�12-2014. Nlr.Craley will conduct the analysis,,evaluate the rate alterna- tives,and generate the deLverables for the project. Mobile Area Water and Sewer System(AL) INIr. Craley has served as Associate Consultant for a comprehensive rate and financial planning study for the Mobile Area Water and Sewer System (iml-kWSS). MAWSS hired RFC to explore alternative rate structures, and reevaluate their existing revenue source,s, including capacity fees, miscellane- iAFTELIS FliNANCIAL C0N5LJLTAN'TG, INC. CITY OF FORT WORTH WATER DEPARTMENT 33 onus fees, and surcharges. 1\4r. Craley has completed service study for the Northeast Ohio Regional Sewer extensive financial, modeling of the complex billing data District (District). RFC conducted a rate structure and existing and alternative rate structures while pro- analysis and recommended the District incorporate N7iding support for the fees and other charges analyses. a base charge into their rate structure. Additionally, RFC worked with the District's financial advisor to Phoenix Water Services Department(AZ) forecast debt scenarios for the District's extensive capi- -Me Cit I y of Phoenix Water Services Department (City) tal improvement program. Mr. Craley's primary task engaged RFC to conduct a two-phase study analyzing: was to develop the rate and financial planning model 1) impact of pricing on demand, and 2) conservation for the District. rate structures. Mr.Craley has served as the Lead Con- sultans for this pr 0j1 e,ct. Mr. Craley identified potential 'Me Ciy and County of Honolulu Department of Envi_ utilities,contacted the utilities, and collected data. Mr. ronmental Services(HI) Craley has also assisted RFC in the analysis and pres- 'Me City and County of Honolulu Department of entati on of the results,. Environmental Services (ENV) engaged R_FC to con- duct a study of their sewer service charge., his study 'Me City has recently engaged RFC to update the included an in-depth examination of NV's pricing wastewater environmental fee. Mr. Craley is serving objectives as well as the advantages and disadvantages as 1_,ead Consultant for RFC and is working on the fi- of ENV's rate structure and potential rate structure al- nancial allocation analysis to determine costs related to ternatives. Mr. Craley reviewed several similar utilities environmental regulations. Mr. Craley has retooled the and compiled presentation materials of the results. existing model to accommodate and model changes in ZD the treatment processes. ENV engaged RFC approximately one year later to continue the analysis on the sewer service charge. Mr. Jefferson County(AL) Craley is currently serving as Lead Consultant to the Jefferson County Office of Sewer Service (County) en- ENV. RFC has modeled the selected rate structure (raged RFC to conduct a wastewater cost of service and alternative, modifications, to the i-ion-moniI tored high Z.1 financial planning study., "the County is facing difficult strength surcharge program, and has recommended capital repayment issues and engaged RFC to assist in a methodology for calculating an update to the facil- determining the most advantageous approach for the ity charge. Finally, RFC has designed a cutting edge County and customers. Mr.Craley served as Lead Con- affordability analysis to evaluate potential affordability sultant for this study and extensively modeled financial programs. plans, for the County based on the implementation of different capital repayment scenarios. Mr. Cr,aley was Pirna County Re g,ional Wastewater Reclamation De- also involved with analysis and presentation of results. partment(AZ) Mr.Craley was part of the four firm, consulting project District of'Columbia Water and Sewer Authority(DC) team analyzing alternative project delivery models, for a RFC is working with the District of Columbia Wa- new wastewater treatment facility for Pirna County Re- ter and Sewer Authority (DC Water) on a multi-year gional Wastewater Reclamation Department (County). contract to provide cost of service, rate, and financial During this project, Mr. Craley provided technical consulting services. IN11r. Craley's responsibilities have expertise. f le extensively modeled the inherent and included assisting with a survey of rate structures, transferred risks of each alternative method, including within the industry and a miscellaneous fee analysis. A design, construction, management, and operation and water and wastewater cost of service study is planned maintenance of the proposed facility. Mr. Craley also for 2012, and Mr. Craley's chief responsibility will be provided clear and concise reporting of risk analysis re- the development of the water and wastewater cost of sults for presentation, service and rate model., In addition, INIr. Craley served as consultant during Northeast Ohio Regional Sewer District(OH) the fiscal year 2010 rate and financial plan update for Mr. Craley served as Lead Consultant for a cost of the County. Mr. Craley provided the same service to ," ELIS FINANCIAL CONSUUANT5,iNC. 34 CITY OF FORT WORTH WATER DEPARTMENT AFT the County in the prior year's update. Specifically, he Town of Sullivan's Island Water and Sewer Depart- worked with the budget and capital improvement plan anent(SC) Mid overall modeling of future rate increases and finan- Mr. Craley has served as staff consultant for a cost of cial.plan. service, study for the Town of Sullivan's Island ('Fown). the Town was tinder recovering revenue and had in- San Francisco Public iti: ties Commission(CA) stituted a multifaceted rate structure that included a mlr�murn charge, a varying basic facility charge, and Mr. Craley served as Consultant during the water and wastewater rate and financial planning study for the multi tiered rates for the water,wastewater and irriga- San Francisco Public Utilities (2 om mission. Mr. Cra- tion service., Mr.Craley and RFC assisted the Town by ley's primary role was to administer a rate survey to constructing a new rate model and rate structure that similarly sized and geographically located utilities for reduced the complexity of the existing rate structure, 'benchmarking purposes. Mr. Craley assisted in the set rates at appropriate levels,and forecasted future rate development of the survey questionnaire, served as increases to maintain revenue neutrality. primary contact for participating utilities, and created applicable analyses. James Island Public Service District(SC) Mr. Craley served as a Consultant for a rate and cost City of Loveland(OH) of service study for the tarries Island Public Service die City of Loveland (Loveland) appealed to the Met- District (PSD). The PSD is involved in an intricate ropolitan Sewer District (MS D) of Greater Cincinnati charge-charge back relationship with Charleston Water to resume control of a wastewater treatment facility System (CPW) regarding several classes of customer and infrastructure previously operated and maintained groups from each utility. RFC has assisted the PSD in by Loveland until 1985, at which point an operating determining the cost of service for each customer class, agreement was established with MSD. RFC provided setting appropriate rates,and working with CPW for a Loveland with economic feasibility studies of various smooth implementation of the new rate structure. Mr* transfer scenarios. Mr. Craley, in particular, has con- Craley has performed research on the local policy as ducted extensive research regarding local and state well as extensive modeling of the updated rate model. policy, EPA standards and requirements, and has as- sisted in the financial modeling of the scenarios. Other Project Experience > Confidential Client (AL) — Litigation Support and Santa Clara Vafley Water District(CA) Research RFC was engaged to provide expert testimony in on- > Town of' Bethel (CT) — Rate and Financial Plan going litigation on the appropriateness of wholesale update rates charged by Santa Clara Valley Water District Mr. > Nova Scot.a.Utility and Review Board,Halifiix(NS, Craley served as staff consultant and assisted this pro- Canada) - Review of Return on Rate Base ject by surveying large western wholesale utilities about > Pima County Regional Wastewater Reclamation their rates and rate setting practices. Additionally, Mr. Department(AZ)—Procurement Support Craley conducted a high level analysis of the utilities > Spartanburg Water and Sanitary Sewer District build-tip of expenses. (SC)— FY2008 Rate Update > United States Navy - Northwest Utility, Privatiza- City of Gainesville and Hall County(GA) tion Procurement Mr. Craley assisted the City of Gainesville (City) and Hall County(County) as staff consultant for a rate dif- SURVEYS ferential study. RFC conducted a cost of service study 2012 Water and Wastewater Rate Survey to calculate the rate diffierential between water and Mr. Craley had evolved into the role of RFC's project wastewater customers within the City and customers, manager for the 2010 Water and Wastewater Rate outside of the City within the County. Mr. Craley re- Survey, and is now overseeing the 2012 Rate Survey viewed the fixed assets of each system and determined a, project. Tie biennial national survey is completed by rate differential based on cost,of service. RFC in conjunction with the American Water Works ................................................... ELIS FINANCIAL CONSULTAN TS, 11,14C. CITY OF FORT WORTH WATER DEPARTMENT 35 Association. ,Mr. Craley manages the day-to-day as- pects: of the survey, including the support staff, and provides critical support in reviewing data and per- fo ming analyses. A record 314,1 utilities responded and Nvere included in the 2010 survey. Association of Metropolitan Water Aor ,,'enci es - Utility Financial Information Survey `1r. Craley has served as Project Manager for RFC's work with the Association of Metropolitan Water Agencies (AMWA). AMWNs membership, which includes utilities that have a service plopulation of at least 100,000, has expressed interest in understanding the rates and rate strumires of its members and the drivers of rate increases. In 1201 0) RFC was, engaged to conduct another comprehensive Utility Financial Information Survey of its membership, as it had done in 21008. Mr. Craley managed the survey development, data collection, and processing of results. he results have been compiled in database format, with the 2008 results, and provided to ANIWA and participants., Mr. Craley has also led a webinar demonstrating use of the database. Water Infrastructure Finance Authority(AZ)—''"mater and Wastewater Residential Rate Survey Mr. Crate y served as Project Manager for the 2011 Water and Wastewater System Survey for the Water Infrastructure Finance Authority of Arizona (WIFA). 11is was the third year RFC conducted the survey for A. Over 400 utilities were solicited for par- ticipation. Mr. Craley served as primary contact for participating utilities and oversaw the data colIection process. Upon completion of' the survey, Mr. Craley compiled the data,reviewed the results for accuracy,and performed analyses used for presentation. 11,14 C. ,),A�TEL�S FINANCIAL CON 36 CITY OF FORT TN WATER DEPARTMENT S UL N T S This page initentionalty Left btiank to faciti ate two-sided printingg rELIS i:NANCIAL CONSULTANTS, HNIC. CITY OF FORT WORTH WATER DEPARTMEN'T 37 IIL AIV IIL AV APPENDIA B . RE, OMMENDATION LETTERS As further evidence,of RFC's focus on client satisfaction, in the fottowing pages we have included recommendation letters from several,of our clients. Antonio Cz Water, system June 22, 2010 Mr. H'arol . Smith Vice President Raftelis Financial Consultants, Inc. 031 S. Caldwell Street, Suite 10 Charlotte, NC 28203. Dear Mr. Smith: On behalf of the Bain Antonio titer System, l wouild like to express appreciation for-the efforts of your company in the conduct f the Comprehensive Coat of Service and Rate Design Study. As your are aware, on June 17, 2010, the San Antonio City Council,voted to pt the recommend ati ns of the late Design n Stu dy with minor revisions. Without the professionalism and responsiveness of you and your staff, the successful completion of the Rate Study would not have been ss% 1 . Please extend our appreciation to your management and staff for their efforts. Sincerely, Douglas P. anon Sr. Vice President/Chief Financial Officer 2800 US.Hwy.281 North*R . Boas 2449 0 San Antonio,TX.78298-2449#www.saws.org '1 " CHIT Department artmen of Public Works & Utilities March 1 2012 The City of Wichita contracted with Raftelis Financial Consultants lest year to complete a Cost of Service Analysis of our water and sewer system. We had a number of challenges, facing the utility, including the e uitability of our customer charges and e, insufficient funding for necessary capital improvements. The Raftells, team had the staff resources and capabilities to lead our utility toward long-term sustainebility. Thy consultant team was very responsive to our needs and ensured the timely completion of the project. They dedicated all resources needed to develop the best possible solutions for our utility. We greatly appreciated how flexible they were in adjusting to new issues that arose during the project and their detailed analysis exceeded the expectations we established at the outset of the initiative. Working with Raftelis proved very beneficial for our utilities — it was incredibly important that we hired the best possible team for our project. Raftelis, delivered with a very helpful product that positioned, us for the future. The data analysis identified a disparity in customer rates that we re now on the path to addressing. Their work ensures that our rates, will support needed infrastructure improvements over the next decade, and we now also have sophisticated financial planning tools to allow us to adjust to changing conditions in the future. We are very pleased with the work product delivered by Raftelis and are grateful for their efforts in a�s,s,iisting our utilities. They have tremendous staff capabilities and are very dedicated to ensuring the satisfaction of their clients. S incerely, Ben Nelson Strategic Services Manager Office of the Director City Hall * Eighth Floor*455 North Main * Wichita, Kansas,67202-1606 T'316.268-4422 W www,wichitagov.org 1 W I WA-1-1,R MNMI; BOARD Subject: RFC Latter of Reference Directors/Officers A.Jackie Robins,oIn, ul, Cia rrnarV res de sherry W. Lewis First Vice Oiairfnanl he Birmingham Water orks Board (Board) has relied on Raftclis filst Vice President itlallCial C011SI.11ta ts, Inc. RFC to provide various, fillancial innd rate Anthony L Barnes C services, e last 10+ years. We have, appreciated RFCs rid Kce Preskient ional"isni, res polls- 11C.Sksof and attention to our, neelds on a variety, ive David S. Herring of rojects. SI ofr Treasurer Aran D: Aorle The Board, which provides, water service to a population Itssistant Secretary-Treasurer approximately 6010,0100 in ta five- qty region ar n Birmingliam, had acquired two s mall sewer systems to protect its source waters in the 9801x. 1' a v i ng stabilized the systems, the Board was interested in 0cL1Si11g 011 its core busilless, providing water service. At the seine Mac Underwood,CPA ties, the Board was approached by two groups interested in General Manager 1.urchasilig the systems. As a result, the Board decided to investigate ii potential sale of the systems. RFC prepared it valuation of the system i, Assistant assisted the Board in d ve1opi g a negotiation strategy, and evaluated General Manag,, �r the i m pil t of lost revenue str mil oil the Board's five-year fintaiicial plan., With tllis assistance, the 3 ard was able to cc ss lly negotiate Darryl R. Jones, P. E. to soil the ystems. Operatrors and Teclin ca Services vice, We do not hesitate to recommend RFC in providing valuiltion, services ar w T'w M. Jones,RE as well is other financial and ,'ate services fir, 'water and wastewater Engineerim and Maintenance Michael Johnson,CPA Sincerely, Finance and AdministrjUon //4-,---dA Nlac Underwood Geneiral. Manager 1600 First Avcnue North.11 0 o 8.101 10,3irn nhighmn i 11aba i i 35283-0110 11ho n e 05-2 4.400 dN +w MMr. "AMWIMS,A" %'fl/ wry .. /%llwww,lr 2 (A rY OF 1E N D E R S O N 0 x r N w p wi A L.a ✓Y 4 44F N d I August 24, 2011 Mr. George Raftelia Raf ells.Financial Consultants, Inc. 201 S,. Lake Boulevard, Suite 8,03 Pasadena, CA 91101 1 Dear Mr.R . s the City of Henderson prepares a utility revenue enhancement package for our elected City. Council consideration, 1 am reminded of the excellent work your firm provided us in the 2006 to 2010 tlmeff ame., Wa continue to use the principles and rate model gaol you provided during that effort. The efforts led by Sudhir Pardiwala,and Steve Vu so were responsive,professional, and timely. They guided us through the preparation of a 1 �-year financial plan, a cost of service rate study, and a comprehensive,rate model for our water, wastewater, and reclaimed water services.These documents continue to form the foundation for our ongoing financial p' . We rely on these elements heavily to manage our finances and justify changes to our rate structure. Bow Mr. Pardiwala and MrNuoso have remained engaged and available to us to assist our use and understanding of the financial models which were delivered. 1 have been extremely pleased with the follow-on support. The partnership etween Raftelis Financial Consultants C and the City of Henderson Department of Utility Services has proven to be extremely productive and valuable to the City of Henderson. RFC has been responsive, reliable,professional, and creditable. With their,guidance and advice, the City of Henderson is well positioned to address,the long term financial challenges we face in operatin.g our utility. 1 appreciate their assistance and will gladly consider C for all our future financial projects. Sincerely, Barney L. Rabold,P.E. Acting Director of Utility,services BLR dv Department,of Utility services w 702-267-2500 fax 702-267-2501, www ,city e e s "co yx.q a rP PIMA COUNTY REGIONAL WASTEWATER RECLAMATION E AR rM NT 201 NORTH STONE VENUE TUCSON, ARIZONA 85701-1207 MICHAEL GRITZUK, P.E. PH: (520) 740 + DIRECTOR FAX: (5120)6120-0,135 ,Augu!st 1 , 2010 Mr. George A. Raftelis Raftelis, Financial Consultant, Inc.. 1031, South Caldwell Street, Suite 100 Charlotte, forth Carolina 28203 Dear George, I am writing to thank you for the excellent service that Ralftelis Financial' Consultants, Inc. RFC has provided to the Pima County Regional Wastewater Reclamation Department over the past several years. During that period, professionals from RFC have assisted us on a number of projects including the development of our Regional Optimization Master la the preparation of three annual financial plans" and are currently assisting us with the procurement of a design/build/operate contractor r for a new wastewater reclamation facility. Additionally, your firm, also helped secure the approval from the Pima County Board of Supervisors for the rate increases needed to begin the im pill en entation of a capital program approaching $1 billion. Your staff has always been well prepared to address our need's. would also life to tale this opportunity to also thank you for the financial services you perfoirmned in the past for the City of Phoenix Water Services Department during the years that I was t a Department Director. We have en dyed working with you and your staff and look forward to continuing working v it you a we continue into the future. Sincerip y, heel' ri u , P.E. I rector. MG:rno Y U4Y of Peoria Fancei Department 8401 West Monroe Street, Peoria,Arizona 85345 1 623- 731-713 . February 27,2012 Mr. George Raftelis Raftel s Financial Consultants, Inc. 511 East Boulevard Charlotte,North Carolina 28203 Dear Mr. Raftells oaf el s Financial Consultants (RFC),has provided a range of financial,analysis, rate and foe anal s s and planning,valuation and economic feasibility studies to the City of Peon'a since 1,997. RFC's industry expertise and analytical support have been invaluable to Peoria as our utility systems have grown and matured over the past 15 years, In the area of valuation and economic feasibility provided Peoria with assistance related to two of the three private water systems,within Peoria's municipal service area. The City considered th e purchase of one or more of the three utilities through fondly negotiations if it was determined to be economically feasible. RFC developed a dcc si -supp :t tool, to allow Peoria staff to assess the economic feasibility of ac a n"rig the private utility using several acquisition scenarios. In addition, RFC assessed th fair market va.lu.e and investment value of the systems and was engaged to update the analysis In subsequent years. While the acquisitions were not o�oorupleted,RFC's analysis and support enabled the City to fully consider the feasibility of these acquisitions. RFC has provided the City with continual support in o the review and dove opment of'its water and wastewater rates and development,impact foes over the last 15 years. Peoria has grown rapidly and RFC's staff have been attentive to the City's financial needs and objectives white mindful to suggest approaches that hest fit Peo a's, circumstances. Peoria has mado a point to review its rate structures every two years with RFC support.. As part of this effort, RFC has developed forecasting models that City staff could update annually. RFC has been very flexible in adapting these tools to moot changing City demands and to improve their functionality. Peor a has been very satisfied with the project support and planning,assistance provided to the City by Raftolis Financial Consultants and would recommend their services to your organization. T )�Aeg; Brent D. Mattingly Finance Director CFO " ` THE CITY OF SAN OIEGO, Mach 5,20,07 Mr. George Raftelis R ell's Financial Consultants,Inc. 11 East Boulevard Charlotte.,NC 28203 Dear Mr.Rafael i . Sub ect. City of San Diego Water Cost of Berke Study am writing to thank Raftelis Financial, Consultants C , d cularl S ir and wala and Steve V'�u so,for the work evolved m' preparing the Water Cost of Service dy, and assisting with presentations to the City's elected officials and commum,ty members on the study. The work they accompLished,on the study was,completed unusually short amount of time and retie ed signifficant amounts of scrutiny from van*olus siolurces, Sudhir and Steve, in addition to providing great technical expertise, were unswervmgly patient and responsive. l know they called on numerous resources Within RFC to meet our many requests,and l am grateful to all who contributed to the success of this project. The Cult of Service Study prepared by RFC provided the foundation on which the Mayor was able to recommend modifyffig olur rates and on which the City Council could rely approving those recommendations. We app"recl"ate the word:performed, and assistance R.FC provided to the City. Meere y, Bafteft Water Department Director n Water Department Director 00 B Slat;Buda 1 300 913)a Son Diep,Cohformal 912111011.45818 DIVERSITY" tee X619)533. 555 a Fox 1 3.7593 t.4"Afiflo Port AF E 1.1 111 F1 A N C I A L(,'.'0 14 5 U L A N J*!,3,, CITY OF FORT WORTH WATER DEPARTMENT 45 M, AV Asolk IL AF AV A PIPENDI'A C* Bu,ARD RE:SuLUT ION On the following pages we have included a, copy of the Board Resolution of RF'C which certifies that William Stannard, who signed the cover letter of this proposal, is the President and CEO,of RFC and is entitled to, represent our firm, empowered to submit the bid,and authorized to sign a contract with the City of Fart" forth. BOARD RESOLUTION OF RAFTELIS FINANCIAL CONSUL TAN"I"S. INC. At the meeting of theBoard of Directors, on October 16 M09 'the following I resolution was proposed and approved, by the Board: WHEREAS, the Amended RFC Bylaws state 'The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any ins,trume�nt in the name of and on behalf of the Corp prat iors and such authority may be general or confined to specific 'instances.' RESOLVED. that the Board authorizes any Officer or Vice President of'the ,Corporation to execute on behalf of the Corporation any contractual documentation related to enter*n " I I ity. grin into an obligation to, perform pr( fessional services for an ent' FURTHER RESOLVED that the Officers referred to in the forego-ing resolutions are as follows-, George A. Raftelis Chief Executive Officer William G. Stannard President Pelffer A. Brandt Chief Operating Officer Diane R. Adams Giief Financial Officer& Secretary Alexis F. Warmath Vice President Harold J. Smith Vice President SLidhir D. Pardiwala Vice President 04 CERTIFICATION I HEREBY CERTIFY that the foregoing 'i's a true and correct copy of a resolution presented to and adopted by the Board of Directors of'Rafteli's Financial Consultants, Inc. at a meeting duly called, and held at on the 16th, day of October 2009, at which a quorum was 'Present and volted, and that such resolution s duly recorded 'in the minute book of this corporation-, that the officers named 'in said resolution have been duly elected or appointed to�, and are the present incumbents of the respective offices set after their respective names; and that the signatures set opposite their respective names are their to and genuine signatures. �-9 Secretary I